Annual Financial Report
and Financial Statements
Year to December 31, 2021

World Intellectual Property Organization
Annual Financial Report and Financial Statements
Year to December 31, 2021

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WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

CONTENTSANNUAL FINANCIAL REPORT ................................................................................ 4
INTRODUCTION .................................................................................................................................. 4
FINANCIAL STATEMENT DISCUSSION AND ANALYSIS .................................................................. 4
Operations and Environment ............................................................................................................................ 4
Financial Objectives and Strategies ................................................................................................................. 5
Risk Management............................................................................................................................................. 5
Environmental, Social and Governance ........................................................................................................... 5
COVID-19 Pandemic ........................................................................................................................................ 6
Financial Performance 2021 ............................................................................................................................. 8
Financial Position 2021 .................................................................................................................................. 14
Cash Flow 2021 ............................................................................................................................................. 16

STATEMENT ON INTERNAL CONTROL 2021 ....................................................... 18
INDEPENDENT AUDITOR’S REPORT ................................................................... 22
FINANCIAL STATEMENTS ..................................................................................... 24
STATEMENT I: STATEMENT OF FINANCIAL POSITION............................................................................ 24
STATEMENT II: STATEMENT OF FINANCIAL PERFORMANCE .................................................................. 25
STATEMENT III: STATEMENT OF CHANGES IN NET ASSETS .................................................................. 26
STATEMENT IV: STATEMENT OF CASH FLOW ...................................................................................... 27
STATEMENT V: STATEMENT OF COMPARISON - BUDGET AND ACTUAL AMOUNTS REVENUE 2021.......... 28
STATEMENT V: STATEMENT OF COMPARISON - BUDGET AND ACTUAL AMOUNTS EXPENSES 2021 ........ 29
STATEMENT V: STATEMENT OF COMPARISON - BUDGET AND ACTUAL AMOUNTS REVENUE 2020/21..... 30
STATEMENT V: STATEMENT OF COMPARISON - BUDGET AND ACTUAL AMOUNTS EXPENSES 2020/21 ... 31
NOTES TO THE FINANCIAL STATEMENTS .................................................................................... 32
Note 1: Objectives and Budget of the Organization ........................................................................................ 32
Note 2: Significant Accounting Policies .......................................................................................................... 32
Note 3: Cash and Cash Equivalents ............................................................................................................... 37
Note 4: Investments........................................................................................................................................ 37
Note 5: Receivables ....................................................................................................................................... 38
Note 6: Intangible Assets................................................................................................................................ 39
Note 7: Property, Plant and Equipment .......................................................................................................... 40
Note 8: Other Non-Current Assets ................................................................................................................. 41
Note 9: Payables and Accruals ...................................................................................................................... 42
Note 10: Employee Benefits ........................................................................................................................... 42
Note 11: Transfers Payable ............................................................................................................................ 46
Note 12: Advance Receipts ............................................................................................................................ 46
Note 13: Provisions ........................................................................................................................................ 47
Note 14: Contingent Assets and Liabilities ..................................................................................................... 47
Note 15: Leases ............................................................................................................................................. 48
Note 16: Related Party Transactions .............................................................................................................. 49
Note 17: Reconciliation of Statement V and Statement II ............................................................................... 50
Note 18: Expenses ......................................................................................................................................... 51
Note 19: Investment Gains/(Losses) .............................................................................................................. 52
Note 20: Financial Instruments ....................................................................................................................... 52
Note 21: Events After the Reporting Date ...................................................................................................... 55
Note 22: Segment Reporting .......................................................................................................................... 55

ANNEX – EX GRATIA PAYMENTS (AUDITED INFORMATION) ........................... 57

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WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

ANNUAL FINANCIAL REPORTINTRODUCTION
The financial statements of the World Intellectual Property Organization (WIPO) for the year ended December 31,
2021, are submitted to the Assemblies of the Member States of WIPO (“WIPO Assemblies”) as required byRegulation 6.7 of the WIPO Financial Regulations and Rules (FRR). The financial statements have been preparedin accordance with International Public Sector Accounting Standards (IPSAS), as developed and approved by theInternational Public Sector Accounting Standards Board (IPSASB).
The report of the External Auditor on the audit of the 2021 financial statements, together with his opinion on thefinancial statements, are also submitted to the WIPO Assemblies as prescribed under Regulation 8.11 and Annex
II of the FRR.
The annual financial report, including financial statement discussion and analysis, is presented in this document
alongside the financial statements and the annual statement on internal control.

FINANCIAL STATEMENT DISCUSSION AND ANALYSISThe following financial statement discussion and analysis includes an overview of the Organization’s operations
and environment, financial objectives and strategies, risk management strategy, financial performance and financial
position during the year ended December 31, 2021. Due to the continued global impact of the COVID-19 pandemic,
a separate overview of its effects on the Organization’s operations and financial results has again been included.
The discussion and analysis has been prepared in accordance with IPSASB Recommended Practice Guideline 2,
and is intended to provide an explanation of the significant items, transactions, and events presented in the financial
statements and the factors that influenced them. This discussion and analysis is not part of WIPO’s financial
statements; however it should be read together with WIPO’s financial statements.

Operations and Environment
WIPO is the global forum for intellectual property services, policy, information and cooperation. It is anintergovernmental organization and specialized agency of the United Nations, with 193 Member States. The
Organization’s mission is to lead the development of a balanced and effective global intellectual property ecosystem
to promote innovation and creativity for a better and more sustainable future. The Organization’s mandate,governing bodies and procedures are set out in the WIPO Convention of 1967, which established WIPO.
WIPO’s Member States determine the direction, budget and activities of the Organization through the decisionmaking bodies. The main policy and decision-making bodies of WIPO are the General Assembly, the Conference
and the Coordination Committee. The General Assembly consists of States party to the WIPO Convention which
are members of any of the Unions administered by WIPO. The General Assembly constituted the Program andBudget Committee to consider matters relating to program, budget, premises and finance. The Conference iscomposed of the States party to the WIPO Convention whether or not they are members of any of the Unions, andis, inter alia, the competent body for adopting amendments to the Convention. The Coordination Committee consistsof elected members of the Executive Committees of the Paris or the Berne Unions, or both, one-fourth of the States
party to the WIPO Convention which are not members of any of the Unions, and Switzerland, as the State on whose
territory the Organization has its headquarters.
The General Assembly appoints the WIPO Director General upon nomination by the Coordination Committee. The
current Director General, Mr. Daren Tang, was appointed on May 8, 2020, and began his six-year term on October 1,
2020. The Director General is the chief executive of the Organization. The Director General is assisted by the Sector
Leads (consisting of the Deputy Directors General and the Assistant Directors General) in providing the strategic
direction of WIPO’s programs and in managing their respective Sectors to ensure the delivery of results in line with
the Organization’s strategic goals and the Program and Budget.
WIPO generates most of its revenue from fees that are paid by users of its intellectual property services for patents,
trademarks and industrial designs. These services are provided through the Patent Cooperation Treaty (PCT),
Madrid and Hague systems. In 2021, fees from these activities represented 94.8 per cent of the Organization’s total
revenue, with PCT system fees alone representing 76.2 per cent. The driver for revenue from these fee-based
services is the international demand for intellectual property titles. Other external factors that may influence theOrganization’s revenue from its fee-based services include research and development investment levels,
technological confidence levels, and exchange rate fluctuations.
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WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

Financial Objectives and Strategies
The financial activities of WIPO are governed by its Financial Regulations, which are approved by the General
Assembly. Financial Rules are established by the Director General in accordance with the provisions of the Financial
Regulations. WIPO’s Member States are informed of any modification of the Financial Rules. The Financial Rules
govern all the financial management activities of the Organization. Authority and responsibility for the
implementation of the Financial Regulations and Rules is delegated by the Director General to the Controller.
Every two years, the Director General presents a Program and Budget to Member States for approval. It details
expected results, performance measures and budgetary planning for all proposed activities. The Program andBudget for the 2020/21 biennium was approved by the Assemblies of the Member States of WIPO in October 2019.
The Program and Budget provides the planning for the biennium within the overall strategic context of the MediumTerm Strategic Plan.
The Organization uses a Results-Based Management system to ensure that resources are budgeted and utilized
in line with organizational results and priorities. Organizational performance is measured and analyzed on a regularbasis through performance indicators, targets and baselines. The WIPO Performance Report provides fullprogrammatic reporting, including detailed performance indicator evaluations, for the year or biennium. Under thissystem, both the Program and Budget and the Medium-Term Strategic Plan form part of WIPO’s planning
framework, along with annual work plans and individual staff objectives.
The Organization manages the levels of its reserves in accordance with its Policy on Reserves. WIPO’s reserves
are accounted for as the net assets of the Organization, and serve to minimize the impact of income shortfalls andmaximize the probability that the Organization can meet its obligations in the short term and maintain financial
stability. One core element of the policy is the mechanism for establishing the required level of reserves as apercentage of the estimated biennial expenditure of the Unions administered by the Organization. The policy alsoestablishes the principles and approval mechanism for the use of reserves for one-time projects for capital
improvements and exceptional circumstances.
The Organization manages its investments in accordance with its Policy on Investments. The policy states that the
primary objectives of the Organization’s investment management, in order of importance, shall be: (i) preservationof capital; (ii) liquidity, and (iii) within the constraints of (i) and (ii), the rate of return. The Organization aims to achievea market rate of return whenever appropriate and possible for both operating and core cash. Strategic cash is to beinvested over the long-term in order to achieve capital growth and thus an overall positive return over time.

Risk Management
WIPO’s Risk Management Policy sets out the Organization’s approach to managing risks and internal controls in aconsistent and business-oriented manner, in order to support the achievement of its strategic goals and expected
results. It is complemented by WIPO’s Risk and Internal Control Management Manual, which covers the day-to-day
operational details of risk and internal control management. The policy and the manual, together with theorganizational arrangements, the establishment of roles and responsibilities, processes and activities for the
management of risks and internal controls represent WIPO’s Risk Management Framework.
Under the guiding principles of WIPO’s Risk Management Policy, risk management is considered an organizationwide responsibility. Organizational level risks are identified and reviewed by WIPO’s Risk Management Group,
which is chaired by the Director General. Risk management is performed as an integral part of the Organization’s
Results-Based Management cycle. WIPO’s Risk Management Framework is guided by the risk appetite noted byits Member States in WIPO’s Risk Appetite Statement.

Environmental, Social and Governance
WIPO has continued to actively contribute to the implementation of United Nations Sustainable Development Goals
6, 7, 11, 12 and 13 under the framework of the WIPO Strategic Goal addressing environmental responsibility.
WIPO ensures the preservation of biodiversity on its campus, which is considered a landmark park, with a numberof species of trees and various plantations. An environment criterion has been introduced and systematically applied
as one of several criteria for assessing and implementing renovations and maintenance of premises and technicalfacilities on the WIPO campus. This is clearly illustrated by a number of projects which are an integral part of theannual program of work: 100 per cent local hydroelectricity provision, LED light fixtures and presence detection to
reduce electricity consumption, cooling using the Lake Geneva water system, waste management system withsorting and recycling of various materials, and water consumption management.

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WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

As part of its procurement processes, WIPO asks potential suppliers to confirm their significant commitment tosustainability. In addition, evaluation teams are strongly encouraged to include sustainability as one of the criteria
for assessing tenders. WIPO has continued its active participation in the 2050Today initiative aimed at achieving
zero emissions in the Canton of Geneva by 2050. The initiative operates under the auspices of the host country at
the federal and cantonal levels, and includes a number of international intergovernmental organizations, local public
and private sectors, and non-governmental organizations.
It is recalled that, since 2010, WIPO has been actively participating in the Greening the Blue initiative of the United
Nations Environment Programme (UNEP). Through this, WIPO participates in the collection of carbon and otheremissions data along with over fifty UN agencies and programs. Since 2014 WIPO has compensated its remaining
unavoidable emissions by purchasing credits through the UN-wide mechanism managed by the United Nations
Framework Convention on Climate Change (UNFCCC).

COVID-19 Pandemic
The COVID-19 pandemic continued to affect WIPO’s operations significantly throughout 2021. The outbreak of the
COVID-19 coronavirus was first declared a public health emergency of international concern (PHEIC) by the World
Health Organization on January 30, 2020, and was subsequently declared a pandemic on March 11, 2020. In its
2019 financial statements, WIPO disclosed the outbreak as a non-adjusting event after the reporting date, in
accordance with IPSAS 14. In its 2020 financial statements, the Organization provided an overview of the effectsof the pandemic on its operations and financial results as part of the financial statement discussion and analysis.
Given the ongoing impacts of the pandemic during 2021, a summary of these effects is again provided with the2021 financial statements. While the impact on the way WIPO conducted its business in 2021 was again profound,the direct, visible and measurable impact on the financial performance for 2021 and the financial position at the endof the year was more limited. Although there can be no objective or exact method of determining the complete
impact of the COVID-19 pandemic on these financial statements, certain broad trends can be identified and arereflected in the following summary.
As of November 2, 2020, all WIPO personnel, except those required to be on-site, had resumed teleworking as aresult of a second wave of the COVID-19 pandemic. In January 2021, the Swiss Federal Council announced atightening of measures to prevent the spread of COVID-19, including mandatory teleworking as far as possible. In
May 2021, a number of COVID-19-related restrictions in Switzerland were gradually eased, and the rule on
mandatory teleworking was converted into a recommendation. WIPO, aligning itself with other UN agencies,
maintained a prudent approach of teleworking for non-premises-dependent positions. As the epidemiologicalsituation continued to improve in Switzerland, the Organization began planning the process of returning to the office.
This started with small groups at the end of June, to pilot and test the approach, followed by larger waves beginningin September and ending in mid-November. By the time all staff were back to the office a new measure was applied,which required anyone entering WIPO premises to be in possession of a valid COVID certificate or equivalent.
Unfortunately, the epidemiological situation in Switzerland then began to deteriorate, with COVID-19 infections
reaching a new high. On December 17, 2021, the Swiss Government re-introduced the requirement to work from
home, and WIPO reinstated mandatory teleworking.
The Organization continued to monitor its directly related COVID-19 expenditure during 2021. This expenditure
totaled approximately 2.2 million Swiss francs, and was lower than the 2020 figure of 3.6 million Swiss francs. The
largest element of the 2021 expenditure was 1.0 million Swiss francs for IT equipment and IT services to meet
remote working and virtual or hybrid meeting requirements. Other expenditure considered directly related to theimpacts of COVID-19 on the Organization’s operations included cleaning and disinfection products, furniture andequipment for new layout requirements, medical supplies and additional medical staff. Travel bans and restrictions
during both 2020 and 2021 had a significant impact on WIPO’s activities involving traditional, in-person
implementation modalities, especially in the areas of capacity building and support services. During 2021, theOrganization continued to adapt its delivery methods in order to respond to the constraints caused by the pandemic.
In financial terms, the cost of missions for staff and consultants fell from 5.7 million Swiss francs in 2019, to 0.5
million Swiss francs in 2020 and 0.1 million Swiss francs in 2021. Official meetings and conferences continued tobe held in hybrid and virtual modes during 2021. The Organization’s third party travel costs, including participants
and lecturers, fell from 10.5 million Swiss francs in 2019 to 0.5 million Swiss francs in 2020 and 0.7 million Swiss
francs in 2021.
Demand for WIPO’s fee-based services under its intellectual property systems was strong in 2021, with innovative
activity overcoming the disruption of the COVID-19 pandemic. PCT application filings in 2021 reached an estimated277,500 applications, a new record figure. This was 0.9 per cent higher than applications in 2020, and 4.6 per centhigher than the 2019 number. Use of the Madrid system had declined at the height of the pandemic in 2020, but
rebounded in 2021. International trademark applications in 2021 totaled an estimated 73,100, up by 14.4 per centon the 2020 number and by 13.9 per cent on the 2019 number. In 2020, the economic fallout from the pandemic
had hit demand for the protection of industrial designs via the Hague system, however this also rebounded in 2021.
Compared to 2020, applications increased by 15.7 per cent, and designs in those applications rose by 20.8 percent. WIPO’s revenue from fees charged for applications under the PCT, Madrid and Hague systems is recognized
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WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

at the date of publication of the application, in accordance with the requirements of IPSAS. WIPO’s fee revenue on
this basis has continued to grow over the last two years, reaching 450.5 million Swiss francs in 2021, compared to441.5 million Swiss francs in 2020, and 420.2 million Swiss francs in 2019.
Concerning the Organization’s assets, as at each year end and in accordance with the requirements of IPSAS,
WIPO performed its annual impairment reviews to ensure that assets were recorded at an appropriate value in thefinancial statements. This exercise did not indicate any impairment attributable to the impacts of the COVID-19
pandemic. The review of financial instruments including accounts receivable, revealed no impact on payment
patterns that would require recognition of credit loss. Although the Organization’s buildings were utilized to a much
lower extent in 2021 and 2020 than in 2019, no impairment was considered necessary for these long-term assets.
For the Organization’s liabilities, the most noticeable consequence of the pandemic was an increase of 5.8 million
Swiss francs in the accumulated annual leave liability at the end of 2020, largely due to the impact of staff not taking
their planned leave entitlements in 2020 as a result of travel limitations. Due to these limitations, as an exceptional
measure as at December 31, 2020, the Organization increased the maximum annual accrual and carry-forwardbalance for annual leave. This measure was reversed as at December 31, 2021, and the accumulated annual leaveliability at the end of 2021 remained comparatively stable against the prior year balance.
During 2021, the Organization achieved investment gains of 22.7 million Swiss francs, with investments performingin line with or above targeted benchmarks. In the prior year, most investment categories also ended the year withpositive returns and WIPO recorded investment gains of 33.4 million Swiss francs. In February and March 2020
global financial markets had reacted strongly to the onset of the COVID-19 pandemic, however the recovery was
equally quick, following the swift and substantial response to the crisis from governments and monetary authorities.
Markets had mostly normalized when the potential rollout of a vaccine in 2021 was announced in November 2020,
which ignited a strong rally in asset prices. It is important to note that WIPO’s investment strategy for its core cash
and strategic cash portfolios is a passive strategy, based on long-term fundamentals and is designed to resist
periods of financial turbulence.

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WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

Financial Performance 2021
The Organization’s results for 2021 showed a surplus for the year of 108.9 million Swiss francs, with total revenueof 475.1 million Swiss francs, total expenses of 388.9 million Swiss francs, and investment gains of 22.7 million
Swiss francs. This can be compared to a surplus of 135.9 million Swiss francs in 2020, with total revenue of 468.3
million Swiss francs, total expenses of 365.8 million Swiss francs, and investment gains of 33.4 million Swiss francs.
The Program and Budget result for 2021 prepared on a modified accrual basis (i.e. not including all IPSAS
adjustments) was a surplus of 143.7 million Swiss francs. The 2021 result for the Organization under IPSAS includes
Special Accounts, Projects financed from reserves, and the impact of adjustments related to full accrual accounting
in accordance with IPSAS:
Program andBudgetSpecial
Accounts

Projects
FinancedfromReserves

IPSAS
Adjustments

Total

Total

2021

2021

2021

2021

2021

2020

(in millions of Swiss francs)
Total revenue

469.1

8.1

-

-2.1

475.1

468.3

Total expenses-348.1

-6.6

-12.1

-22.1

-388.9-365.8Investment gains/(losses)

22.7

-

-

-

22.7

33.4

Net surplus/(deficit)

143.7

1.5

-12.1

-24.2

108.9

135.9

The chart below summarizes the principal differences between the Program and Budget surplus of 143.7 million
Swiss francs, and the surplus for the whole Organization prepared on an IPSAS basis of 108.9 million Swiss francs:
Movement from budget result to IPSAS result 2021

143.7
+1.5
-10.2-12.1

millions of Swiss francs-9.6

BUDGETRESULT

Modifiedaccrual basis

Projects
financed fromreserves

Special
Accounts

Depreciation
andamortization

Entity differences

-15.6

-1.5

Changes in
employeebenefitliabilities

Special
Accounts
revenuerecognition

Accounting basis differences

+2.5

108.9

Capitalization/
disposal of
fixed assets

IPSAS RESULTPER FINANCIAL
STATEMENTS

Full accrualbasis

The WIPO financial statements as prepared in accordance with IPSAS include all areas and activities of the whole
Organization. The inclusion of the results before IPSAS adjustments of Projects financed from reserves (deficit of
12.1 million Swiss francs) and Special Accounts (surplus of 1.5 million Swiss francs) represent ‘entity differences’
between the budget result and the surplus per the IPSAS financial statements. The application of full accrual basis
accounting in accordance with IPSAS leads to a number of ‘accounting basis differences’ which impact the result
for the year. The net impact of these adjustments is a 24.2 million Swiss francs reduction in the surplus. The principal
accounting differences include:the depreciation expense of buildings and equipment and the amortization expense of intangible assets as thecost of these assets is spread over their useful lives;adjustments to reflect movements in employee benefit liabilities based on IPSAS compliant calculations,
including those prepared by external actuaries;the capitalization of costs relating to the improvement or acquisition of fixed assets, along with losses from thedisposal or write-off of fixed assets.
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WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

Revenue
Composition of 2021 revenue on an IPSAS basis(in millions of Swiss francs)

Madrid system fees
82.4
(17.3%)

Assessedcontributions
17.4
Voluntary(3.7%)
contributions
6.7(1.4%)
Hague system fees
6.2
(1.3%)

PCT system fees
361.8
(76.2%)

Other revenue
0.6(0.1%)

Total revenue of the Organization for 2021 was 475.1 million Swiss francs, representing an increase of 1.5 per centcompared to the 2020 total revenue of 468.3 million Swiss francs. The largest source of revenue during 2021 was
PCT system fees, accounting for 76.2 per cent of total revenue. Revenue from PCT system fees rose by 0.9 percent compared to 2020.
Madrid system fees were the second largest source of revenue during the year 2021, representing 17.3 per cent of
total revenue. Revenue from Madrid system fees increased by 8.1 per cent compared to 2020. Hague system fees,
Lisbon system fees, assessed contributions, voluntary contributions (contributions by donors to Special Accounts)
and other revenue (publications, arbitration and mediation and other/miscellaneous revenue) comprise theremaining 6.5 per cent of the Organization’s total revenue. The following table provides a summary of the changes
by revenue type compared to the prior year:
Revenue variance 2020-2021
2021

2020

Net Change

Net Change%(in millions of Swiss francs)
Revenue
Assessed contributions

#

17.4

17.6

Voluntary contributions

#

6.7

5.8

0.9

15.5

Publications revenue

#

0.4

0.5

-0.1

-20.0

3.2

0.9

-0.2

-1.1

Fees

-

PCT system

#

361.8

358.6

Madrid system

#

82.4

76.2

6.2

8.1

Hague system

#

6.2

6.7

-0.5

-7.5

Lisbon system

#

0.1

-

0.1

N/A

#

450.5

441.5

9.0

2.0

2.5

2.1

0.4

19.0

Sub-total fees

Arbitration and Mediation#-

Other/miscellaneous revenue

#

-2.4

0.8

-3.2

-400.0Total revenue

#

475.1

468.3

6.8

1.5

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WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

PCT revenue is principally comprised of international filing fees (the basic fee, plus supplementary page fees, lessreductions for e-filings and least developed countries). The total PCT system fees revenue figure also comprises
other fees (including handling and transfer fees) and foreign exchange gains and losses:
Detail of PCT system fees – 2017-2021
2021

2020

2019

2018

2017

(in millions of Swiss francs)
International filing fees

363.1

366.9

335.6

315.4

293.6

Other fees

3.1

3.2

3.4

3.6

3.6

Exchange gain/(loss) on fees received

-3.3

-8.6

-2.6

1.7

0.4

Other exchange gain/(loss)

-1.1

-2.9

1.7

0.7

-1.2

Total PCT system fees

361.8

358.6

338.1

321.4

296.4

Revenue from PCT system fees on an IPSAS basis increased by 0.9 per cent compared to 2020. This overall
increase in revenue was achieved despite slightly lower publications compared to 2020, and was due to lower
exchange losses on fees than seen in the prior year. In the financial statements prepared under IPSAS, revenue
for international filing fees from PCT applications is recognized only on publication of the application. In 2021 there
were 263,280 publications compared to 264,584 in 2020. Lower publications in 2021, despite increasing PCTapplications, was essentially an issue of timing as in 2020 there were fifty-three weeks of publications instead of theusual fifty-two. When looking at revenue from PCT international filing fees as recognized in accordance with IPSAS,
the following graph shows how annual revenue has moved in line with the number of published applications in theyear:

PCT - International filing fees and publications 2017-2021
300,000

400.0

Number of publications

300.0
200,000

250.0

150,000

200.0
150.0

100,000

100.0
50,000

50.0

0

0.0
2017

2018

2019

Number of publications

2020

2021

International fees for published applications

10

Revenue (millions of Swiss francs)

350.0

250,000

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

Madrid system fees principally comprise basic fees received from applications for registrations or renewals and fees
for subsequent designations:
Detail of Madrid system fees – 2017-2021
2021

2020

2019

2018

2017

(in millions of Swiss francs)
Basic fees (registrations and renewals)

70.0

64.7

64.2

62.4

58.5

Subsequent designations

6.3

6.0

6.4

5.8

5.5

Other fees

6.1

5.5

6.2

6.1

5.9

Total Madrid system fees

82.4

76.2

76.8

74.3

69.9

In accordance with IPSAS, revenue from Madrid fees for registrations, renewals and subsequent designations is
recognized in the financial statements upon publication. Revenue from registrations and renewals as recognized inaccordance with IPSAS has moved in line with the number of registrations and renewals in the year. Between 2020
and 2021, the number of registrations increased from 62,062 to 68,265.In the same period the number of renewals
also rose from 32,831 to 34,218:

120,000

80.0
70.0

100,000

60.0
80,00050.0

60,00040.0
30.0

40,00020.0
20,00010.0

0Revenue (millions of Swiss francs)

Number of registrations and renewals

Madrid - Basic fees and registrations/renewals 2017-2021

0.0
2017

2018

2019

Registrations and renewals

2020

2021

Fees for published registrations and renewals

Revenue from Hague system fees totaled 6.2 million Swiss francs for 2021, representing a decrease of 7.5 per centcompared to the 2020 figure of 6.7 million Swiss francs. Registrations under the Hague system fell from 6,795 in2020 to 6,106 in 2021. Lisbon system fees totaled 71,000 Swiss francs in 2021, compared to 7,000 Swiss francs in2020. This increase is due to individual fees payable to Cambodia and Samoa following their accession to the
Geneva Act of the Lisbon Agreement.
Revenue from assessed contributions of 17.4 million Swiss francs in 2021 represents 3.7 per cent of total revenue,
while revenue from voluntary contributions of 6.7 million Swiss francs in 2021 represents 1.4 per cent of total
revenue. Although revenue from voluntary contributions increased by 15.5 per cent compared to the prior year, it isstill significantly down on the 2019 figure of 10.9 million Swiss francs. Revenue from voluntary contributions is
recognized as work is performed and expense incurred in line with the relevant agreement. Due to the impacts of
the COVID-19 pandemic, lower than anticipated expenses have been incurred which in turn has reduced therecognition of revenue in 2020 and 2021. The actual receipt of voluntary contributions in 2021 was 8.1 million Swiss
francs, compared to 9.4 million Swiss francs in 2020 and 10.1 million Swiss francs in 2019.
Arbitration and mediation revenue of 2.5 million Swiss francs was up by 0.4 million Swiss francs on the prior year,
while publications revenue of 0.4 million Swiss francs was 0.1 million Swiss francs lower than in 2020.
Other/miscellaneous revenue totaled -2.4 million Swiss francs in 2021, compared to 0.8 million Swiss francs in2020. The Organization includes exchange gains/losses as part of other/miscellaneous revenue, and in 2021
recognized net losses of 3.8 million Swiss francs, compared to net losses of 0.6 million Swiss francs in 2020. Theseexchange losses correspond to the revaluation of bank accounts and operating cash short-term investments heldin currencies other than Swiss franc.

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WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

ExpensesComposition of 2021 expenses on an IPSAS basis(in millions of Swiss francs)

Operating expenses
24.0(6.2%)

Contractual services
99.8(25.6%)

Depreciation andamortization
9.6(2.5%)

Personnel expenditure
244.7(62.9%)

Interns and WIPO
fellowships
5.7(1.5%)
Other expenses
1.7(0.4%)

Equipment andsupplies
3.4(0.9%)

Detailed breakdown of 2021 expenses(in millions of Swiss francs)
Personnel
expenditure
244.7

Posts

Contractual
services
99.8

Operatingexpenses
24.0

235.3

Temporary staff

8.9

Other staff costs

0.5

Conferences

2.3

Individual contractual services

16.2

Other contractual services

81.3

Premises and maintenance

21.3

Communication

1.1

Representation & other operating expenses

1.1

United Nations joint services

0.5

Buildings depreciation
Depreciation
and amortization Equipment depreciation
9.6
Intangible assets amortization

8.5

Interns and WIPO Internships
fellowships
WIPO fellowships
5.7

0.4

0.5
0.6

5.3

Equipment andsupplies
3.4

Supplies and materials

3.2

Furniture and equipment

0.2

Other expenses
1.7

Travel, training and grants

1.5

Finance costs

0.2

Total expenses of the Organization for 2021 were 388.9 million Swiss francs, representing an increase of 6.3 percent compared to 2020 total expenses of 365.8 million Swiss francs. The largest expense for the Organization was
personnel expenditure of 244.7 million Swiss francs, representing 62.9 per cent of total expenses. Contractual
services of 99.8 million Swiss francs were the second largest expense for the Organization, followed by operating
expenses of 24.0 million Swiss francs. The following table provides a summary of the changes by expense typecompared to the prior year:

12

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

Expenses variance 2020-2021
2021

2020

Net Change(in millions of Swiss francs)

Net Change%

Expenses
Personnel expenditure

#

244.7

233.7

11.0

4.7

Internships and WIPO fellowships

#

5.7

5.5

0.2

3.6

Travel, training and grants

#

1.5

1.8

-0.3

-16.7

Contractual services

#

99.8

88.6

11.2

12.6

Operating expenses

#

24.0

20.9

3.1

14.8

Equipment and supplies

#

3.4

5.3

-1.9

-35.8

Depreciation and amortization

#

9.6

9.8

-0.2

-2.0

Finance costs

#

0.2

0.2

-

-

Total expenses

#

388.9

365.8

23.1

6.3

Although the Organization’s expenses increased in 2021 compared to 2020, they were still lower than the 2019
figure of 401.4 million Swiss francs. Non-personnel expenditure for the 2020-21 biennium was significantly reduced
due to the COVID-19 pandemic, with Program and Budget expenditure on a comparable basis ending at 54.2 million
Swiss francs below the approved budgeted figure in the biennium. This was the net result of lower expenditure on
travel, contractual services, and operating expenses, partially offset by additional exceptional COVID-19 related
expenditure. The most significant reduction across 2020 and 2021 was for travel, training and grants, which fell from
17.5 million Swiss francs in 2019 to 1.8 million Swiss francs in 2020 and 1.5 million Swiss francs in 2021. Thisdecrease was a direct consequence of the effects of the COVID-19 pandemic on the Organization’s activities, withrestrictions over movement and mass gatherings significantly impacting travel for missions and physicalparticipation in conferences and meetings.
In 2021 there was, however, clearly some catch-up on contractual services and operating expenses compared to
the first year of the biennium. Contractual services in 2021 totaled 99.8 million Swiss francs. These expenses
increased by 11.2 million Swiss francs compared to the 2020 figure, and were also higher than the 2019 figure of
96.1 million Swiss francs. Compared to 2020, expenses rose for individual contractual services by 4.0 million Swiss
francs, other commercial service providers by 3.5 million Swiss francs, and IT commercial service providers by 2.5
million Swiss francs. Operating expenses in 2021 totaled 24.0 million Swiss francs, an increase of 14.8 per centcompared to the 2020 total of 20.9 million Swiss francs. The 2021 figure was also higher than 2019 operating
expenses of 22.5 million Swiss francs. Compared to 2020, the main area of increase concerned premises andmaintenance costs, which rose by 2.8 million Swiss francs. Expenses for equipment and supplies fell from 5.3 million
Swiss francs in 2020 to 3.4 million Swiss francs in 2021, and depreciation and amortization of capitalized fixed
assets were also lower than in the prior year, totaling 9.6 million Swiss francs, compared to a charge of 9.8 million
Swiss francs in 2020.
The Organization’s personnel expenditure comprises principally net base salary and post adjustments for staff inposts or temporary positions. Combined these represent 145.8 million Swiss francs, 59.6 per cent of total personnel
expenditure for 2021. Total personnel expenditure in 2021 of 244.7 million Swiss francs has increased by 4.7 percent compared to total personnel expenditure of 233.7 million Swiss francs in 2020. This increase is primarily due
to the impacts of movements in long-term employee benefit liabilities recognized through personnel expenditure.
The cost of internships and WIPO fellowships, which is not included as part of personnel expenditure, increasedslightly compared to 2020, rising by 3.6 per cent to 5.7 million Swiss francs.

13

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

Financial Position 2021
As at December 31, 2021, the Organization had net assets of 408.5 million Swiss francs, with total assets of 1,577.3
million Swiss francs and total liabilities of 1,168.8 million Swiss francs. During 2021, the Organization’s net assets
increased by 21.4 million Swiss francs. The surplus for the year of 108.9 million Swiss francs was largely offset byactuarial losses related to WIPO’s liability for ASHI, which totaled 87.5 million Swiss francs and were recognizedthrough net assets:
Movement in net assets 2019-2021

millions of Swiss francs+135.9+108.9-113.0

-87.5

408.5

Actuarial losses
through net
assetsNet assets
December 31,
2021

387.1

364.2

Net assets
December 31,
2019

Surplus on an
IPSAS basis
2020

Actuarial losses
Net assets
and adjustment to December 31,
Revaluation
2020
Reserve Surplus

Surplus on an
IPSAS basis
2021

The following chart provides a summary of the Statement of Financial Position of WIPO as at December 31, 2021.
Total assets of 1,577.3 million Swiss francs are composed primarily of cash, cash equivalents, investments andfixed assets. Total liabilities of 1,168.8 million Swiss francs are principally employee benefits, and payables andadvance receipts:
Summary of assets and liabilities December 31, 2021
1,577.3

millions of Swiss francs

Net assets
408.5

1,168.8

Cash & cash
equivalents
and investments
1,114.5

Employee benefits
615.8

Fixed assets
375.4

Payables andadvance receipts
466.1

Other 87.4

Other 86.9

AssetsLiabilities

14

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

AssetsAt the end of 2021, the Organization held cash, cash equivalents and investment balances of 1,114.5 million Swiss
francs, representing 70.7 per cent of total assets. This included amounts totaling 211.1 million Swiss francs
classified as restricted, and amounts totaling 237.2 million Swiss francs representing strategic cash andinvestments. The total balance of 1,114.5 million Swiss francs was 182.5 million Swiss francs higher than thebalance of 932.0 million Swiss francs at the end of 2020.
The Organization holds significant fixed assets (land, buildings, intangible assets and equipment) with a total net
book value of 375.4 million Swiss francs. During 2021, costs totaling 2.9 million Swiss francs were capitalized for
additions and improvements to fixed assets. The total depreciation and amortization charge against all fixed assets
was 9.6 million Swiss francs for 2021.
Other assets of the Organization totaling 87.4 million Swiss francs included accounts receivable and advancepayments. Within this, the most significant balance was PCT debtors totaling 62.3 million Swiss francs. At any point
during the year, a significant number of PCT applications have been filed with receiving Offices and possibly
received by WIPO, for which no corresponding fee payment has yet been received by the Organization. The balanceof PCT debtors increased compared to the prior year, when it totaled 53.1 million Swiss francs.

Liabilities
Employee benefit liabilities of 615.8 million Swiss francs were mainly comprised of the ASHI liability of 573.7 million
Swiss francs, representing 93.2 per cent of the total employee benefits liability as at December 31, 2021. The ASHI
liability increased by 120.9 million Swiss francs compared to the 2020 balance of 452.8 million Swiss francs. The
calculation of the ASHI liability is performed by an independent actuary. In accordance with IPSAS requirements,
the ASHI liability recognized in the financial statements represents the present value of all expected future benefits
to existing retirees and their dependents, and all accrued post-employment benefits of active staff. On average,
medical costs increase with age, so the most significant expected medical costs remain to be paid in the future. To
manage the cost and risk of its collective medical insurance plan, WIPO has secured an insurance contract thatallows a level per person premium to be paid for existing retirees and active staff, thus reducing the cash paid on
behalf of older retirees relative to their incurred medical cost.
The ASHI liability calculation incorporates a number of actuarial assumptions. These include the discount rate,
medical cost trend rates, annual medical claims cost, retirement rates and mortality rates. Changes to theseassumptions year on year lead to actuarial gains and losses which are recognized as part of the liability in theStatement of Financial Position. A breakdown of the movement in the liability due to actuarial gains and losses isprovided in Note 10 of these financial statements. The increase in the liability in 2021 was mainly due to amodification of the annual medical claims cost assumption. For the 2020 liability calculation, this assumption wasderived from the medical insurance premiums by applying an age-specific grading factor. During 2021, theindependent actuary performed a detailed analysis of claims cost data, and from this generated an updated
assumption derived from actual medical claims. It is noted that basing the liability on medical claims costs is different
from considering only the medical insurance premiums, which are mitigated by lower expected costs for the younger
staff and new joiners.
Other changes to actuarial assumptions included an increase in the discount rate from 0.30 per cent to 0.50 per
cent, which led to a decrease in the liability. A reduction in the medical cost trend rate from 2.90 per cent to 2.50
per cent also had the effect of lowering the liability. The following graph shows how the ASHI liability has developedsince 2017, and includes actuarial forecasts for 2022-2025 (applying the same assumptions as for the 2021
calculation). The graph also shows how discount rates and medical cost trend rates have changed since 2017:15

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

Movement in ASHI liability 2017-2025 (December 31)
800.0

6.00

700.0
5.00

4.00
500.0
400.0

3.00

per cent

millions of Swiss francs

600.0

300.0
2.00
2022 -2025 actuarial forecast

200.0

1.00
100.0
0.0

0.00

2017

2018
Benefit obligation

2019

2020

2021
Discount rate

2022

2023

2024

2025

Medical cost trend rate

The projections of the ASHI liability for 2022-2025 do not consider gains or losses from possible future changes in
actuarial assumptions, which could significantly impact calculations in subsequent years. The projected increase in
the liability for 2022-2025 reflects the demographic make-up of participants in WIPO’s collective medical insurance
plan. Projected additional ASHI benefits accrued by active staff (which increase the ASHI liability) outweighprojected medical costs paid to retirees (which reduce the ASHI liability).
As at December 31, 2021, payables and advance receipts totaled 466.1 million Swiss francs, and mainly included
deferred revenue for the processing of international applications (under the PCT, Madrid and Hague systems) for
302.3 million Swiss francs. This deferred revenue balance principally concerns PCT system fees of 299.1 million
Swiss francs. Revenue from fees relating to the processing of international applications is deferred until the related
application is published. At any given time during the year, a number of PCT applications will have been filed witheither receiving Offices or WIPO which have yet to be published. As at December 31, 2021, for applications with a2020 or 2021 filing date, it is estimated that approximately 212,197 applications were unpublished. At the end of theprior year 2020, approximately 206,528 applications filed in 2019 or 2020 were unpublished and the deferred
revenue balance for PCT system fees was 286.1 million Swiss francs.

Cash Flow 2021
The Organization’s cash, cash equivalents and investments balance has continually increased since 2011. A further
significant increase of 182.5 million Swiss francs was achieved in 2021. This included fair value increases of 6.8
million Swiss francs on the Organization’s medium-term investment portfolio, and 7.8 million Swiss francs on the
Organization’s long-term investment portfolio. The principal cash inflows to the Organization are payments of PCT
system fees. Monthly cash inflows from PCT system fees averaged 30.4 million Swiss francs during the year 2021
compared to 30.7 million Swiss francs during the year 2020. The Organization generally holds its cash deposits ininstant access bank accounts. During 2021, the Organization continued to hold balances in term deposit accounts(for periods up to 12 months). This has allowed the Organization to reduce the level of charges on certain instantaccess bank accounts following the introduction of negative interest rates during 2015.
As at December 31, 2021, WIPO’s medium-term investment portfolio (core cash investments) had a fair value of
675.9 million Swiss francs, and the long-term investment portfolio (strategic cash investments) had a fair value of
221.6 million Swiss francs. WIPO’s non-current investments are held at fair value in the Statement of Financial
Position. Fair value increases in these investment portfolio assets during 2021, as noted above, reflect short-term
market volatility. Core cash balances are invested with the objective of generating a positive return over rolling
five-year periods, and strategic cash balances are invested over the long term. WIPO’s investments generated
dividends of 5.5 million Swiss francs during 2021.
Cash, cash equivalents and investments can be presented separately between unrestricted, restricted and strategic
cash balances. There are several elements of cash and cash equivalents which are classified as restricted.
Restricted cash includes current accounts held for third parties (applicants under the PCT, Madrid and Hague
systems, and also certain contracting parties), fees collected on behalf of contracting parties, deposits received in
16

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

connection with pending procedures related to trademarks, and Special Accounts held on behalf of donors ofvoluntary contributions. Strategic cash represents the funds held by the Organization which have been allocated forthe future financing of after-service employee benefit liabilities, including ASHI. The balance of strategic cash was
237.2 million Swiss francs as at December 31, 2021. This comprised the long-term investment portfolio (including
unrealized gains) of 221.6 million Swiss francs, and cash balances yet to be invested of 15.6 million Swiss francs.
These balances included the additional amounts generated in 2021 from the Program and Budget charge applied
to the cost of posts for the funding of after-service employee benefit liabilities.
Unrestricted, restricted and strategic cash 2015-2021
1,200.0

Total
1,114.5

1,100.0
Total
932.0

1,000.0

237.2

millions of Swiss francs

900.0
Total
754.1

800.0
700.0
600.0
500.0

Total
489.5

Total
542.3

Total
544.7

108.6

124.4

Total
616.0

190.2

211.2
211.1

186.0

125.8
179.7

102.1
400.0

182.8
161.8

300.0

161.9

666.2

174.9
534.8

200.0
100.0

384.2
225.5

271.9

245.4

2016

2017

307.4

0.0

2015

Unrestricted cash/investments

2018
Restricted cash

17

2019

2020

Strategic cash/investments

2021

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

STATEMENT ON INTERNAL CONTROL 2021

Scope of responsibility
As Director General of the World Intellectual Property Organization (WIPO), I am accountable, in accordance withthe responsibility assigned to me, in particular, by Regulation 5.8 (d) of the Financial Regulations and Rules (FRRs),
for maintaining a system of internal financial control that ensures:(i) the regularity of the receipt, custody and disposal of all funds and other financial resources of theOrganization;(ii) the conformity of obligations and expenditures with appropriations or other financial provisions approvedby the General Assembly or with the purposes and rules relating to specific trust funds;(iii) the effective, efficient and economic use of the resources of the Organization.
In signing this statement, I rely in particular on assurance provided to me in the form of Management Representation
Letters (MRLs) by my Sector Leads. I rely also on the Organization’s assurance functions, electronic systems andinformation provided to me in the WIPO Assurance Summary.

Purpose of the system of internal control
Our system of internal control is a process, effected by the Governing Bodies, the Director General, senior
management and other personnel, designed to provide reasonable assurance of the Organization’s ability to reachits strategic objectives and Expected Results. The aim of this system of internal control is to manage risk to atolerable level rather than to eliminate it entirely. As such, it sets out to provide reasonable assurance over the:Reliability of financial reporting – transactions authorized and properly recorded and material errors or
irregularities are either prevented or detected in a timely manner;
Effectiveness and efficiency of processes, the safeguarding of assets and the exercise of economy; andCompliance with WIPO’s regulatory framework and any other applicable rules and regulations.

This Statement is presented in line with the seven components of WIPO’s Accountability Framework(WO/PBC/29/4), which itself is aligned to the COSO Internal Control framework and Three Lines Model1.
My current statement on WIPO’s internal control processes, as described above, applies for the year ended
December 31, 2021, and up to the date of the approval of the Organization’s 2021 financial statements.

1. Results based planning
Resource needs are driven by the substantive work program planned for implementation during a biennium, in
accordance with the Medium Term Strategic Plan (MTSP). Member States’ approval of the 2020/21 Program andBudget set the implementation parameters for the biennium, and control processes centered on the WIPO FRRs
ensured that WIPO Programs were implemented in accordance with those approvals
Annual workplanning, implementation and monitoring are controlled via a suite of enterprise resource management
tools and appropriate work processes throughout the biennium.

2. Performance and risk management
With the Covid pandemic continuing in 2021, the year was a period of notable uncertainty and disruption globally.
Despite the disruptions, usage of our fee-paying services was steady, and this demonstrates to some extent, theresilience of the global IP ecosystem. At the organizational level, I chaired the Risk Management Group and the
Crisis Management Team. In the context of the global health and economic crisis, these entities work together tomanage the Organization’s overall risk portfolio as outlined in the WIPO Risk Appetite Statement, for which arevision will be proposed to Member States in 2022. Critical risks and appropriate responses were reviewed
regularly. These include the following key risks that we faced in 2021 and beyond:1

https://www.theiia.org/globalassets/documents/resources/the-iias-three-lines-model-an-update-of-the-three-lines-of-defensejuly-2020/three-lines-model-updated.pdf

18

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

Program Delivery Risk

The Covid-19 pandemic and the restrictions related to on-site presence, travel and meetings continued to place
severe pressure on some Programs to deliver planned activities.
Control and mitigation: Our global IP systems continued to operate almost seamlessly. However, those of WIPO’s
Programs that are largely dependent on traditional, in-person implementation modalities for the holding of meetingsand capacity building events continued to be significantly impacted by the pandemic. These Programs have adapted
their content and delivery methods in order to respond to the temporary constraints caused by the pandemic.
Cyber Risk

WIPO is exposed to the risk of cyber-attacks, potentially more so during periods of geopolitical instability, and therisk of malicious or accidental breach of data leading to unauthorized disclosure or misuse of WIPO’s confidential
information, or disruption of business operations remained.
Control and mitigation: We continue to implement a number of phased fit-for-purpose information assurance
strategies across governance, people, processes and technologies, to strengthen its information security postureand its resilience against evolving cyber security threats.
Supply Chain Risk

Supply chain issues owing to political issues, international trade / compliance, factory shutdowns, port and/or
shipping delays, surge in demand, and stockpiling may lead to unexpected delays in procurement of ICT equipment
or replacement parts, which could in turn create project delays or service disruption.
Control and mitigation: The Organization will analyze the benefits of pre-ordering and/or keeping redundant
supplies in house, for high impact or risk equipment or components. In addition to forward planning, whereappropriate our “cloud first” policy reduces our exposure to this risk from an IT infrastructure standpoint, throughadditional capacity and flexibility.


Political Risk

The global geopolitical context has increased the continuing challenges of global collective action in multilateralfora, and in turn multilateral decision making, which may make significant agreements amongst Member States lesslikely, as well as putting at risk the delivery of services to stakeholders, clients, and Member States.
Control and mitigation: Like all organizations, some risk causes are out of our sphere of influence. As a technicalspecialized agency of the United Nations, our mandate is focused on Intellectual Property (IP). To mitigate the risk,
we continued to work with our Member States to build collective understanding, and build understanding of thevalue of multilateralism as a key strand of the IP ecosystem.

3. Monitoring, Oversight, Complaints and Response Mechanisms
As Director General of WIPO, I am ultimately accountable for the effectiveness of the system of internal controls.
My assertion, structured by the “Three Lines” below, is supported and informed by:

Under ‘first line’ Sector Leads, and their teams, in pursuit of the Organization’s Expected Results have signed
MRLs from which I derive assurance. These letters recognize their responsibility for having and maintaining,in the Sectors for which they were responsible, well-functioning systems and a mechanism for internal control
aimed at preventing and/or detecting instances of fraud and major errors. I also take into account thecommitment that each officer with delegated financial authority (“Alternate”) formally makes when acceptingthat designation. Taking these elements into account, I conclude the ‘first line’ is sound;The ‘second line’ is management’s role to address enterprise risks, including compliance with our regulatory
framework, ethical behavior, internal control, information and technology security, sustainability, and quality
assurance. Having Chaired the Risk Management Group (RMG) throughout the year, whose purpose is topromote a culture of responsible risk management in WIPO, reviews and monitors WIPO’s financial situation,
the key risks to the achievement of Expected Results and this present Statement together with the evidence
that supports it, I am confident our ‘second line’ approach is robust;The ‘third line’ is our Internal Oversight Division (IOD), on whose assurance and advisory services I rely, throughthe annual report of the Director of IOD, reports of internal audit and evaluation as well as management
implication reports resulting from investigations. IOD’s assessment is that there were no significant risks or
breakdown of governance and internal controls, while they did identify some areas for continuous improvement.
Internal Audit reports issued by IOD during in 2021 were an audit and integrity review of absence management,

19

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

a review of the performance management and staff development system, and a review of WIPO crisis
management during the pandemic. Audits that were primarily undertaken in 2021, with the report issued in thefirst quarter of 2022 included an audit of the Hague Platform Project and an audit on Enterprise Risk
Management. The reports identified many positive aspects, and which no significant risks to the Organization
were identified, I commit that management will implement the agreed recommendations in areas that need
improvement;


The External Auditor, whose audit aims to provide independent assurance to Member States, to add value to
WIPO's financial management and governance, and to support its objectives through the external audit
process; I take into account the External Auditor’s recommendations, such as the improvements we have madeto Capital Master Plan governance, and am assured by their work;



The Joint Inspection Unit of the United Nations System, which is mandated to conduct evaluations, inspections
and investigations system-wide; andGoverning Bodies’ observations are complemented throughout the year through oversight provided by the
Independent Advisory Oversight Committee (IAOC). Its mandate includes the promotion of risk management
and internal controls, reviewing the effectiveness and operational independence of the internal oversightfunction, and reviewing and advising on the ethics function;

I further ensure that feedback mechanisms are in place for Member States, customer complaint resolution cervices
are in place for clients and that formal and informal conflict resolution mechanisms are in place for personnel.

4. Control Activities
A comprehensive framework of management controls are recorded that ensure the effective and efficient functioningof end-to-end business processes in compliance with the Organization’s regulatory framework. These controls areassessed annually for strength of operation, and reported to the RMG and the IAOC in the WIPO Assurance
Summary.
During 2021, the Organization operated in a hybrid working environment as part of the future of work and to manage
the restrictions owing to the pandemic. Control activities continued to be undertaken in the hybrid environment aspreviously, ensuring the robust control environment was maintained. Preparations were made in 2021, to put inplace the appropriate platforms and systems for improvements relating to data analytics for internal controls, withthe view to having a first phase of analytical capabilities in place in 2023. WIPO’s controls operate across theOrganization, irrespective of geographical location. A review started in 2021 of internal controls as they apply inExternal Offices, which will continue in 2022. Additionally, an increased identification of internal controls in theareas of premises and property was completed.

5. Information and Communication
The RMG is kept informed of risks and controls through access to our business intelligence system. Quarterly risk
reports and annual risk management reports allow the RMG to take stock of the evolving risk landscape. External
specialist risk intelligence provides independent advice to ensure a comprehensive view, and internally, an annual
survey to senior staff tests their level of confidence in accountability systems at WIPO.
A robust Information and Data Governance Framework is in place reflecting its importance to WIPO. A Master DataManagement Policy provides a directive control for managing critical data and provides an authoritative point ofreference for integration into the enterprise architecture. An information classification and handling policy provides
a preventive control raising understanding and application of levels of information confidentiality.
The portfolio of Enterprise Resource Planning (ERP) solutions provide a high level of control, including transactional
level system controls and data analytics. The Enterprise Risk Management solution ensures controls are
systematically owned, assessed and as appropriate linked to risks. The annual WIPO Performance Reportpresented to Member States includes a review of the evolution and impact of risks on the delivery of Expected
Results for each Program.

6. Ethical Standards and Integrity
WIPO’s Ethics Office is an independent office established in 2010 which conducts second-line activities to cultivate
and nurture a culture of ethics, integrity and accountability, and thereby enhance the trust in and credibility of WIPO.
The Chief Ethics Officer who reports directly to the Director General is accountable for ensuring the design,development and implementation of an effective Ethics program to enhance integrity, compliance with ethics rules,
and the ethical conduct of the Organization’s operations. The conduct and actions of WIPO personnel must always
adhere to the highest ethical standards, as set out in the WIPO Code of Ethics.

20

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

The mandate and responsibilities of the Ethics Office include the provision of confidential advice and guidance on
ethical issues and standards of conduct; ethics policy advocacy and development and education and outreach on
ethics matters. The fully independent whistleblower protection role of the Ethics Office further contributes to an
environment of trust and enhances the capacity for WIPO to respond to wrongdoing.
The Ethics Office also administers WIPO’s Policy on Financial Disclosure and Declaration of Interests which aims
to: (i) promote transparency and accountability; (ii) enhance internal and external public trust in the integrity of theOrganization; and (iii) assist the Organization to manage the risk of actual and perceived conflicts of interest throughdisclosure, mitigation and prevention.
WIPO has in place anti-fraud controls, in accordance with good practices and applicable international standards,
based on risk assessments. Appropriate fraud prevention, detection, response and data collection procedures andprocesses exist in the Organization, reflecting WIPO’s comprehensive anti-fraud governance framework.

7. Control Environment
A set of Entity Level Controls represent the overarching controls that help define the Organization’s culture, and its
commitment to ethical values, competence and accountability.
The Organization’s regulatory framework is kept under review, as external and internal factors change, and in thisregard, a revision to the Financial Regulations and Rules is on the agenda of the Program and Budget Committee
in 2022. WIPO’s procurement policy and procedures include a robust delegation model for procurement authority
as well as additional controls and reporting. A Vendor Sanctions policy and a Code of Conduct for Staff Involved in
Procurement actions represent important control processes.
WIPO’s Core Values are expressed as “Shaping the Future”, “Acting Responsibly”, “Delivering Excellence” and“Working as One”, and all contribute to fostering a culture of accountability and strong ethical values.

Conclusion
Based on the contents of this statement and the evidence that underpins it, I conclude that, to the best of myknowledge and information, there have been no material weaknesses that would affect the reliability of theOrganization’s financial statements, nor are there significant matters arising which would need to be raised in thepresent document for the period covered.

Daren Tang
Director General
May 18, 2022

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WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

INDEPENDENT AUDITOR’S REPORTto the General Assembly of the World Intellectual Property Organization
Opinion on financial statements
I have audited the financial statements of the World Intellectual Property Organization for the year ended
31 December 2021, which comprise the statement of financial position, statement of financial performance,statement of changes in net assets, statement of cash flow, statement of comparison - budget and actual amounts
revenue for 2021, statement of comparison - budget and actual amounts expenses 2021, statement of comparison- budget and actual amounts revenue for 2020/21, statement of comparison - budget and actual amounts expenses
for 2020/21, and the related notes, including the significant accounting policies.
In my opinion, the accompanying financial statements present fairly, in all material respects, the financial positionof the World Intellectual Property Organization as at 31 December 2021 and its financial performance and its cash
flows for the year then ended in accordance with International Public Sector Accounting Standards.

Opinion on regularity
In my opinion, in all material respects, the revenue and expenses have been applied to the purposes intended by
the General Assembly of the World Intellectual Property Organization and the financial transactions conform to theOrganization’s Financial Regulations.

Basis for opinion
I conducted my audit in accordance with International Standards on Auditing (ISAs) and the Organization’s Financial
Regulations. My audit of regularity was undertaken using the principles set out within the ISAs. My responsibilities
under these standards are further described in the Auditor’s responsibilities for the Audit of the Financial Statements
section of my report.
I am independent of the World Intellectual Property Organization in accordance with the ethical requirements thatare relevant to my audit of the financial statements in the United Kingdom, namely the Financial Reporting Council’s
Ethical Standards 2019 as applicable to listed entities. My staff and I have fulfilled our other ethical responsibilities
in accordance with these requirements. I believe that the audit evidence I have obtained is sufficient and appropriate
to provide a basis for my opinions.

Other Information
Management is responsible for the other information. The other information comprises information included in the
Annual Financial Report and the Statement on Internal Control 2021. My opinion on the financial statements does
not cover the other information and I do not express any form of assurance conclusion thereon. In connection with
my audit of the financial statements, my responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or my knowledge obtained in
the audit or otherwise appears to be materially misstated. If, based on the work I have performed, I conclude that
there is a material misstatement of this other information, I am required to report that fact. I have nothing to reportin this regard.

Responsibilities of Management and Those Charged with Governance for the financial
statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with
International Public Sector Accounting Standards, and for such internal control as management determines isnecessary to enable the preparation of financial statements that are free from material misstatement, whether due
to fraud or error.
In preparing the financial statements, management is responsible for assessing the World Intellectual Property
Organization’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 WorldIntellectual Property Organization or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the World Intellectual Property Organization’s
financial reporting process.

22

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

Auditor’s Responsibilities for the Audit of the Financial Statements
My responsibilities are to obtain reasonable assurance about whether the financial statements as a whole are freefrom material misstatement, whether due to fraud or error, and to issue a certificate that includes my opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordancewith ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error andare considered material if, individually or in the aggregate, they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with ISAs, I exercise professional judgment and maintain professional scepticism
throughout the audit. I also:•

identify and assess the risks of material misstatement of the 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 my 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 thatare appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectivenessof the World Intellectual Property Organization’s internal control;•

evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimatesand related disclosures made by management;•

conclude on the appropriateness of the World Intellectual Property Organization’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 World Intellectual Property
Organization’s ability to continue as a going concern. If I conclude that a material uncertainty exists, I am
required to draw attention in my report to the related disclosures in the financial statements or, if suchdisclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence
obtained up to the date of my report. However, future events or conditions may cause the World Intellectual
Property Organization to cease to continue as a going concern; and•evaluate the overall presentation, structure and content of the financial statements, including thedisclosures, and whether the financial statements represent the underlying transactions and events in amanner that achieves fair presentation.

In addition, I am required to obtain evidence sufficient to give reasonable assurance that revenue and expenses
reported in the financial statements have been applied to the purposes intended by the General Assembly and thefinancial transactions confirm to the Financial Regulations which govern them.
I communicate with those charged with governance regarding, among other matters, the planned scope and timingof the audit and significant audit findings including any significant deficiencies in internal control that I identify during
my audit.

ReportI have also issued a long-form audit report on the results of my audit.

(signed) Gareth Davies
Comptroller and Auditor General
National Audit Office157-197 Buckingham Palace Road
Victoria
London. SW1W 9SP
United Kingdom

Date: 19 May 2022

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WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

FINANCIAL STATEMENTS
STATEMENT I: Statement of Financial Position
as at December 31, 2021
(in thousands of Swiss francs)

Note

December 31, 2021

December 31, 2020

ASSETS
Current assets
Cash and cash equivalents

3

147,507

143,540Investments

469,463

116,116

Contributions receivable

5

1,441

1,547

Exchange transactions receivable

5

86,016

66,792

304,427

327,995
672,344

Non-current assets
Investments

4897,497

Intangible assets

6

24,12524,028Property, plant, and equipment

7351,255

358,491

Other non-current assets

8-

TOTAL ASSETS

7,995

1,272,877

1,062,858

1,577,304

1,390,853

LIABILITIESCurrent liabilities
Payables and accruals

919,546

15,531

Employee benefits

10

16,00914,405

Transfers payable

11

107,411

98,228Advance receipts

12335,597

317,841

Finance lease

15

129

104

Provisions

13

492

986

85,936

71,707565,120

518,802480,936

Current accounts
Non-current liabilities
Employee benefits

10599,785

Finance lease

15

324

415

Advance receipts

12

3,578

3,637

603,687

484,988

TOTAL LIABILITIES

1,168,807

1,003,790

Accumulated Surpluses

667,854565,601

Special Projects Reserve

34,83428,173

Revaluation Reserve Surplus

20,36820,368-320,901-233,421

6,342

6,342

408,497

387,063

Actuarial gains/(losses) through Net Assets
Working Capital Funds
NET ASSETS

The accompanying notes form an integral part of these financial statements
Director General

24

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

STATEMENT II: Statement of Financial Performancefor the year ended December 31, 2021
(in thousands of Swiss francs)
2021

2020

Assessed contributions

17,43917,551

Voluntary contributions

6,708

5,769

Publications revenue

413

498

PCT system

361,775

358,557

Madrid system

82,42976,209Hague system

6,185

6,667

Lisbon system

71

7

450,460

441,440

Arbitration and Mediation

2,465

2,091

Other/miscellaneous revenue-2,386923

475,099

468,272

244,631

233,735

5,696

5,478

Note
REVENUEFees

Sub-total fees

TOTAL REVENUE
EXPENSES

18

Personnel expenditure
Internships and WIPO fellowships
Travel, training and grants

1,464

1,772

Contractual services

99,827

88,619Operating expenses

24,003

20,873Equipment and supplies

3,429

5,340

Depreciation and amortization

9,604

9,773

244

240

388,898

365,830

22,71333,429108,914

135,871

Finance costs
TOTAL EXPENSES
Investment gains/(losses)

19

SURPLUS/(DEFICIT) FOR THE PERIOD

25

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

STATEMENT III: Statement of Changes in Net Assets
for the year ended December 31, 2021
(in thousands of Swiss francs)

Accumulated
Surpluses

SpecialProjects
Reserve

Actuarial
Revaluation gains/(losses)
Working
Reservethrough Net
Capital Funds
Surplus
AssetsNet Assets at December 31, 2019

418,41339,49018,532

Surplus/(deficit) for the year 2020

144,421-8,550-Transfer to/from Special Projects
Reserve

1,057-1,057

Adjustment to Accumulated Surpluses

1,710

Adjustment to Revaluation
Reserve Surplus

Actuarial gains/(losses)-118,550

Net Assets
Total

6,342

364,227--

135,871

-

-

-

-

-1,710

-

-

-

-

-

-

1,836

-

-

1,836

-

-

-

-114,871--114,871

Net Assets at December 31, 2020

565,601

28,173

20,368-233,421

6,342

387,063

Surplus/(deficit) for the year 2021

118,996-10,082---

108,914

Transfer to/from Special Projects
Reserve-18,733

18,733

-

-

-

-

1,990

-1,990

-

-

-

-

-

-

-

-87,480--87,480

667,854

34,834

20,368-320,901

6,342

408,497

Adjustment to Accumulated Surpluses

Actuarial gains/(losses)

Net Assets at December 31, 2021

26

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

STATEMENT IV: Statement of Cash Flowfor the year ended December 31, 2021
(in thousands of Swiss francs)

Note

2021

2020

Cash flows from operating activities
Surplus (deficit) for the period

Statement II

108,914

135,871

Depreciation and amortization

6&7

9,604

9,773

(Increase) decrease in receivables

5-19,118

7,288(Increase) decrease in other assets

8

7,995

190

Increase (decrease) in advance receipts

12

17,697

4,019

Increase (decrease) in payables and accruals

9

4,015

-8,505

Increase (decrease) in transfers payable

11

9,183

3,736

Increase (decrease) in provisions

13

-494

-825

Increase (decrease) in current accounts

14,2294,084

Movement in employee benefits (1)Interest, dividends, investment and exchange
gains/losses (2)32,97324,246-16,545-37,170

168,453

142,707-2,722

Net cash flows from operating activities
Cash flows from investing activities
Additions to property, plant, and equipment

7-1,748

Disposals of property, plant, and equipment

7

-

536

(Increase) decrease in intangible assets

6

-717

-270

(Increase) decrease in investments

4-178,500-240,431

Increase (decrease) in fair value of investments

4

14,64433,280

Dividends and interest on investments

19

5,459

4,948

-160,862-204,659

-66

519

-66

519

Effect of exchange rate changes on cash andcash equivalents-3,558-1,058Net increase (decrease) in cash and cash
equivalents

3,967-62,491

Net cash flows from investing activities
Cash flows from financing activities
Increase (decrease) in finance lease obligations

15

Net cash flows from financing activities

Cash and cash equivalents at beginning of year3

143,540

206,031

Cash and cash equivalents at end of year3

147,507

143,540(1) Includes the effect of recognition of actuarial gains/losses through net assets;(2) Interest earned, dividends received, the effect of exchange rate changes on cash and cash equivalents, and gains/losses oninvestments.

27

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

STATEMENT V: Statement of Comparison - Budget and Actual Amounts
Revenue 2021
for the year ended December 31, 2021
(in thousands of Swiss francs)
Original Budget
2021

Updated Budget
2021

(1)

(2)

17,377

17,377

17,497

PCT system

338,346

362,300

361,775-525

Madrid system

84,0405,570

82,4296,185-1,611

Hague system

82,663
6,572

Lisbon system

25

25

71

46

427,606

451,935

450,460-1,475

1,650

1,650

2,465

815

Assessed contributions

Actual Revenue on
comparable basis 2021

Difference
2021
(3)

120

Fees

Sub-total fees
Arbitration and Mediation
Publications

615

384

384

412

28

Other/miscellaneous

1,822

1,822

-1,713-3,535TOTAL REVENUE

448,839

473,168

469,121-4,047(1) Original Budget represents the second year of the approved Program and Budget for the 2020/21 biennium. The biennial
revenue budget amounts to 882.8 million Swiss francs, and was approved by the Assemblies of Member States of WIPO in
October 2019.
(2) Updated Budget includes updated revenue estimates for the PCT, Madrid and Hague systems as per the October 2021
Forecast from the Department for Economics and Data Analytics.
(3) Represents the difference between the Updated Budget 2021 and actual revenue on a comparable basis for the year ended
December 31, 2021.

28

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

STATEMENT V: Statement of Comparison - Budget and Actual Amounts
Expenses 2021
for the year ended December 31, 2021
(in thousands of Swiss francs)
Original Final Budget
Budgetafter
2021
Transfers
2021(1)

Actual Expense
on acomparable
basis
2021

Difference
2021

1,524

(2)

Program

Program Title

1

Patent Law

3,131

3,171

1,647

2

Trademarks, Industrial Designs & Geographical Indications

2,742

3,090

2,395

695

3

Copyright and Related Rights

8,708

11,240

8,751

2,489

4

Traditional Knowledge, Traditional Cultural Expressions &Genetic Resources

3,664

3,513

2,568

945

5

The PCT System

111,848

114,328

102,432

11,896

6

Madrid System

31,521

31,94427,735

4,209

7

WIPO Arbitration and Mediation Center

6,533

7,320

6,141

1,179

8

Development Agenda Coordination

1,900

2,531

1,445

1,086

9

Africa, Arab, Asia and the Pacific, Latin America and the
Caribbean Countries, Least Developed Countries

14,972

15,577

11,6193,958

10Transition and Developed Countries

4,575

4,075

2,992

1,083

11

The WIPO Academy

6,750

7,678

7,164

514

12

International Classifications and Standards

3,708

4,207

4,078

129

13

Global Databases

5,542

5,543

4,714

829

14

Services for Access to Information and Knowledge

3,969

4,419

4,258

161

15

Business Solutions for IP Offices

7,449

7,487

5,868

1,619

16

Economics and Statistics

3,907

4,266

4,163

103

17

Building Respect for IP

2,410

2,386

1,866

520

18

IP and Global Challenges

2,525

4,008

3,811

197

19

Communications

8,497

9,955

8,173

1,782

20

External Relations, Partnerships and External Offices

7,743

8,622

6,186

2,436

21

Executive Management

13,625

15,241

12,003

3,238

22

Program and Resource Management

20,47323,31818,801

4,517

23

Human Resources Management and Development

13,524

15,17912,278

2,901

24

General Support Services

20,20021,41019,481

1,929

25

Information and Communication Technology

25,30829,786

27,8161,970

26Internal Oversight

2,643

2,946

2,912

34

27

Conference and Language Services

18,89917,92914,803

3,126

28

Information Assurance, Safety and Security

12,451

13,486

10,2763,210

30

SMEs and Entrepreneurship Support

3,318

4,358

3,340

1,018

31

The Hague System

6,674

8,078

7,741

337

32

Lisbon System

717

717

680

37

UN

Unallocated

7,354

7,713

-

7,713

TOTAL EXPENSES

387,280

415,521348,137

67,384INVESTMENT GAINS/(LOSSES) (3)NET SURPLUS/(DEFICIT)

-844

-844

22,71323,55760,71556,803

143,697

86,894IPSAS adjustments to surplus (4)-24,251

Special Accounts and Projects financed from reserves-10,532

ADJUSTED NET SURPLUS PER IPSAS

108,914(1) Original Budget represents the budget of the second year of the approved Program and Budget for the 2020/21 biennium. The biennial budget
amounts to 768.4 million Swiss francs, and was approved by the Assemblies of the Member States of WIPO in October 2019.
(2) Represents the difference between the Final Budget after Transfers 2021 and Actual Expense on a comparable basis for the year ended
December 31, 2021.
(3) Investment losses in the Program and Budget for the 2020/21 biennium were related to short-term cash balances (operating cash) only.
(4) The IPSAS adjustments to the surplus are detailed in Note 17 of these financial statements.

29

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

STATEMENT V: Statement of Comparison - Budget and Actual Amounts
Revenue 2020/21
for the biennium ended December 31, 2021
(in thousands of Swiss francs)
Original Budget
2020/21

Updated Budget
2020/21(1)(2)

34,75434,75434,989PCT system

665,575

718,490

720,332

1,842

Madrid system

160,720
11,300158,638
12,852-2,082

Hague system

162,039
12,639

Lisbon system

50

50

78

28

840,303

890,560

891,900

1,340

3,300

3,300

4,556

1,256

Assessed contributions

Actual Revenue on
comparable basis 2020/21

Difference
2020/21
(3)

235

Fees

Sub-total fees
Arbitration and Mediation
Publications

1,552

767

767

910

143

Other/miscellaneous

3,645

3,645

-297

-3,942TOTAL REVENUE

882,769

933,026

932,058-968(1) Original Budget represents the approved Program and Budget for the 2020/21 biennium. The biennial revenue budget amounts
to 882.8 million Swiss francs, and was approved by the Assemblies of Member States of WIPO in October 2019.
(2) Updated Budget includes updated revenue estimates for the PCT, Madrid and Hague systems as per the October 2021
Forecast from the Department for Economics and Data Analytics.
(3) Represents the difference between the Updated Budget 2020/21 and actual revenue on a comparable basis for the year ended
December 31, 2021.

30

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

STATEMENT V: Statement of Comparison - Budget and Actual Amounts
Expenses 2020/21
for the biennium ended December 31, 2021
(in thousands of Swiss francs)
Original Final Budget
Budgetafter
2020/21Transfers
2020/21(1)

Actual Expense
on acomparable
basis
2020/21

Difference
2020/21(2)

Program

Program Title

1

Patent Law

6,177

6,067

3,574

2,493

2

Trademarks, Industrial Designs & Geographical Indications

5,418

5,733

4,362

1,371

3

Copyright and Related Rights

17,287

19,848

16,7103,138

4

Traditional Knowledge, Traditional Cultural Expressions &Genetic Resources

7,280

6,925

5,126

1,799

5

The PCT System

222,079

221,640

201,187

20,453

6

Madrid System

62,551

59,43854,516

4,922

7

WIPO Arbitration and Mediation Center

12,924

13,637

11,6172,020

8Development Agenda Coordination

3,774

4,160

2,724

1,436

9

Africa, Arab, Asia and the Pacific, Latin America and the
Caribbean Countries, Least Developed Countries

29,562

28,862

23,2185,644

10Transition and Developed Countries

9,021

8,365

6,643

1,722

11

The WIPO Academy

13,402

13,703

13,145558

12International Classifications and Standards

7,345

7,415

7,166

249

13

Global Databases

10,96910,969

9,824

1,145

14

Services for Access to Information and Knowledge

7,862

7,866

7,768

98

15

Business Solutions for IP Offices

14,69513,021

11,1401,881

16

Economics and Statistics

7,667

8,106

7,845

261

17

Building Respect for IP

4,781

4,732

3,723

1,009

18

IP and Global Challenges

5,008

6,466

6,236

230

19

Communications

16,834

17,41915,357

2,062

20

External Relations, Partnerships and External Offices

15,303

15,656

12,024

3,632

21

Executive Management

26,91527,627

23,6983,929

22Program and Resource Management

40,61740,731

35,107

5,624

23

Human Resources Management and Development

26,86328,292

24,5893,703

24

General Support Services

40,20738,15336,0102,143

25

Information and Communication Technology

50,46856,81754,6422,175

26Internal Oversight

5,191

5,270

5,268

2

27

Conference and Language Services

37,48434,25829,471

4,787

28

Information Assurance, Safety and Security

24,81024,373

21,2983,075

30

SMEs and Entrepreneurship Support

6,566

7,113

5,740

1,373

31

The Hague System

13,214

15,74914,960789

32

Lisbon System

1,420

1,415

1,330

85

UN

Unallocated

14,707

8,575

-

8,575

TOTAL EXPENSES

768,401

768,401

676,018

92,383INVESTMENT GAINS/(LOSSES) (3)NET SURPLUS/(DEFICIT)-1,688-1,68856,142

57,830112,680

162,937

312,182

149,245IPSAS adjustments to surplus (4)-50,266

Special Accounts and Projects financed from reserves-17,131

ADJUSTED NET SURPLUS PER IPSAS

244,785(1) Original Budget represents the approved Program and Budget for the 2020/21 biennium. The biennial budget amounts to 768.4 million Swiss
francs, and was approved by the Assemblies of the Member States of WIPO in October 2019.
(2) Represents the difference between the Final Budget after Transfers 2020/21 and Actual Expense on a comparable basis for the biennium ended
December 31, 2021.
(3) Investment losses in the Program and Budget for the 2020/21 biennium were related to short-term cash balances (operating cash) only.
(4) The IPSAS adjustments to the surplus are detailed in Note 17 of these financial statements.

31

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

NOTES TO THE FINANCIAL STATEMENTS
Note 1: Objectives and Budget of the Organization
WIPO functions in accordance with the WIPO Convention, signed in Stockholm on July 14, 1967 and as amended
on September 28, 1979. WIPO was recognized as a specialized agency of the United Nations in 1974. WIPO isbased in Geneva, Switzerland, and enjoys privileges and immunities as granted under the 1947 Convention on thePrivileges and Immunities of the Specialized Agencies of the United Nations and the 1970 Headquarters Agreementwith the Swiss Federal Council, notably being exempt from paying most forms of direct and indirect taxation. WIPO
also has external offices in Abuja, Algiers, Beijing, Moscow, Rio de Janeiro, Singapore and Tokyo, along with acoordination office in New York.
WIPO’s vision is to help create a world where innovation and creativity from anywhere is supported by intellectual
property for the good of everyone. To this end, WIPO leads the development of a balanced and inclusive global
intellectual property ecosystem. WIPO works with Member States and other stakeholders to ensure that intellectual
property is seen as a tool for every Member State to create jobs, attract investments, drive enterprise growth, andultimately develop economies and societies for a better and more sustainable future.
WIPO is funded from fees derived from services provided by the Organization, assessed contributions paid by its
Member States, and voluntary contributions from Member States and other donors. The Organization operates
within the framework of a biennial program and budget that provides the appropriations that constitute the budgetary
expenditure authorizations approved by the Assemblies for the financial period. The approval of the appropriations
provides the authority for the Director General to commit and authorize expenses and to make payments for the
purposes assigned within the limits of the appropriations.

Note 2: Significant Accounting Policies
Basis of Preparation
These financial statements have been prepared in accordance with and comply with International Public Sector
Accounting Standards (IPSAS). The financial statements are presented in Swiss francs, which is the reporting andfunctional currency of WIPO, and all values are rounded to the nearest thousand. The accounting policies havebeen applied consistently to all years presented.
The financial statements have been prepared on the basis of historical cost, unless stated otherwise. The Statementof Cash Flow is prepared using the indirect method. The financial statements are prepared on an accrual and goingconcern basis.
IPSAS 42 Social Benefits, was published in January 2019 with an original implementation date of January 1, 2022.
This implementation date has now been deferred to January 1, 2023 due to the COVID-19 pandemic and thechallenges it has created. It is not expected that this standard will impact the Organization’s financial statements.
IPSAS 43 Leases, was published in January 2022 with an implementation date of January 1, 2025. WIPO iscurrently analyzing the impacts of this new standard.

Cash and Cash Equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks, deposits held up to 90 days andother short-term highly liquid investments that are readily convertible to cash and subject to insignificant risk ofchanges in value.

Investments
Investments are classified as current or non-current assets according to the time horizon of the investment
objectives. If the time horizon is less than or equal to one year, they are classified as current assets, and if it is morethan one year, they are classified as non-current assets.

Foreign Currency Transactions
The functional currency of WIPO is the Swiss franc. All transactions occurring in other currencies are translated into
Swiss francs using the United Nations Operational Rates of Exchange (UNORE), or an equivalent comparable
benchmark from the financial market, which represent those prevailing at the date of the transactions. Both realized
and unrealized gains and losses resulting from the settlement of such transactions and from the translation at the32

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

reporting date of assets and liabilities denominated in currencies other than WIPO’s functional currency arerecognized in the Statement of Financial Performance.

Revenue Recognition
Revenue from exchange transactions comprising the fees charged for applications under the Patent Cooperation
Treaty (PCT) system, the Madrid system and the Hague system is recognized at the date of publication. Revenue
from fees received for applications not published at the reporting date is deferred until publication has been
completed. The portion of the PCT application fee covering the costs of translation of non-English language
patentability reports received after publication is also deferred until the translation is completed. All other fees under
the PCT, Madrid and Hague systems are recognized when the services covered by the fee have been provided.
Revenue from publications is recognized upon full delivery of the goods. Revenue from Arbitration and Mediation
services is recognized upon delivery of the services related to the submission of a request covered by the fee
received. Credit card charges incurred on payments received for exchange transactions are recognized throughother/miscellaneous revenue.
Revenue from non-exchange transactions such as voluntary contributions to Special Accounts supported byenforceable agreements is recognized as revenue at the time the agreement becomes binding unless theagreement includes conditions related to specific performance or the return of unexpended balances. Suchagreements require initial recognition of a liability to defer revenue recognition and then revenue is recognized as
the liability is discharged through performance of the specific conditions included in the agreement.
Assessed contributions are recognized as revenue at the beginning of each year of the budget period to which theassessment relates.

Expense Recognition
Expenses are recognized as goods are received and as services are delivered.

Receivables
Receivables from exchange transactions include fees which are charged to users of WIPO’s intellectual property
services through the PCT, Madrid and Hague systems. These are measured at the fair value of the consideration
receivable for PCT, Madrid and Hague system fees once the international application has been filed.
Receivables from non-exchange transactions include uncollected assessed contributions. These are measured at
the fair value of the consideration receivable. An allowance for non-recoverable receivables is recorded equal tothe assessed contributions frozen by action of the General Assembly in 1989 and 1991, plus contributions
receivable from Member States that have lost the right to vote in accordance with Article 11, paragraph 5 of the
WIPO Convention.

Property, Plant, and Equipment
Equipment is valued at cost less accumulated depreciation and impairment. Equipment is recognized as an asset
if it has a cost of 10,000 Swiss francs or more per unit. Gains and losses on disposal are determined by comparing
the proceeds with the carrying amount of the asset and are included in the Statement of Financial Performance.
Heritage assets including donated works of art are not valued in the financial statements.
Land is carried at fair value as determined by an independent valuation in accordance with International Valuation
Standards. Changes in fair value are recognized directly in net assets through the Revaluation Reserve Surplus.
Buildings and constructions in use are valued at the cost of construction when new plus the cost of subsequent
improvements, less accumulated depreciation. For the initial recognition of buildings in use as at January 1, 2010,
the date of transition to IPSAS, the value when new was determined by reference to a deemed cost calculated by
an external consultant and representing the value of each component at construction plus improvements existingat the initial recognition, less accumulated depreciation based upon the remaining useful life of each component.
Subsequent costs of major renovations and improvements to buildings and constructions that increase or extend
the future economic benefits or service potential are valued at cost.
Depreciation is charged so as to write off the full cost of property, plant, and equipment over its estimated usefullife using the straight-line method. Where property, plant, and equipment is only in use for part of the year (due toacquisition, disposal or retirement during the year), depreciation is charged only for the months during which theasset was in use. The following ranges of useful lives are applied to the different classes and components ofproperty, plant, and equipment:

33

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

Class/Component

Estimated useful life

Equipment
Communications and IT equipment

5-10 years

Vehicles15 years

Furniture and furnishings

10 years

Buildings
StructureFaçade50-100 years
50 years

Perimeter bollards/walls

20-80 years

Land Improvements

40-50 years

Roof

50-60 years

Floors, walls, stairways

50 years

Flooring, wall coverings

20-40 years

Specialist fittings

15-40 years

Heating and ventilation

25-30 years

Sanitary facilities
Electrical installations
Elevators

40 years
25-50 years
40 years

The carrying values of property, plant, and equipment are reviewed for impairment if events or changes incircumstances indicate that the book value of the asset may not be recoverable. If such an indication exists, therecoverable amount of the asset is estimated in order to determine the extent of impairment loss, if any. Any
impairment loss is recognized in the Statement of Financial Performance.

Intangible Assets
Intangible assets are carried at cost less accumulated amortization and impairment. Amortization is provided on astraight-line basis on all intangible assets of finite life, at rates that will write off the cost or value of the assets overtheir useful lives. The useful lives of major classes of intangible assets have been estimated as follows:
Class
Software externally acquired
Software internally developed
Licenses and rights

Estimated useful life
5 years
5 years
Period of licence/right

Acquired computer software licenses are capitalized based on costs incurred to acquire and bring to use the specificsoftware. Software or software licenses purchased externally are recognized as an asset if they have a cost of
20,000 Swiss francs or more per unit. Costs that are directly associated with the internal development of softwarefor use by WIPO are capitalized as intangible assets only if the recognition criteria under IPSAS 31 are met. Direct
costs include the software development employee costs.
The rights to use property in the Canton of Geneva acquired by the Organization through purchase have beenrecognized at historic cost and are amortized over the remaining period of the grant. The rights to use property
granted by the Canton of Geneva acquired without cost, that revert back to the Canton at the end of the grant, arenot valued in the financial statements.

Financial Assets
Financial assets are recognized initially at fair value, normally being the transaction price. The subsequent
measurement of financial assets depends on their classification. WIPO classifies its financial assets as either
measured at amortized cost or measured at fair value through surplus or deficit. The classification depends on
WIPO’s management model for the financial assets and the contractual cash flow characteristics of the financial
assets. WIPO assesses on a forward-looking basis the expected credit losses associated with its financial assets
classified as measured at amortized cost.

34

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

Financial Liabilities
WIPO initially recognizes its financial liabilities at fair value. After initial recognition, financial liabilities aresubsequently measured at amortized cost.

Derivative Financial Instruments
WIPO uses derivative financial instruments such as forward currency contracts to hedge its foreign currency risks.
These financial instruments are initially recognized at fair value on the date on which the derivative contract isentered into and are subsequently re-measured at fair value.

Employee Benefits
Liabilities are established for After-Service Health Insurance (ASHI), repatriation grants and travel, and long-term
accumulated annual leave as determined by an independent actuary on an annual basis utilizing the projected unit
credit methodology of valuation. For the ASHI liability, actuarial gains and losses are recognized in net assets. In
addition, liabilities are established for the value of short-term accumulated annual leave, home leave not taken,
overtime earned but unpaid, separation benefits, performance rewards, and for education grants payable at thereporting date that have not been included in current expenditure.
WIPO is a member organization participating in the United Nations Joint Staff Pension Fund (the Fund), which wasestablished by the United Nations General Assembly to provide retirement, death, disability and related benefits toemployees. The Fund is a funded, multi-employer defined benefit plan. As specified by Article 3(b) of theRegulations of the Fund, membership in the Fund shall be open to the specialized agencies and to any otherinternational, intergovernmental organization which participates in the common system of salaries, allowances andother conditions of service of the United Nations and the specialized agencies.
The Fund exposes participating organizations to actuarial risks associated with the current and former employeesof other organizations participating in the Fund, with the result that there is no consistent and reliable basis forallocating the obligation, plan assets, and costs to individual organizations participating in the Fund. WIPO and theFund, in line with the other participating organizations in the Fund, are not in a position to identify WIPO’s
proportionate share of the defined benefit obligation, the plan assets and the costs associated with the plan with
sufficient reliability for accounting purposes. Hence WIPO has treated this plan as if it were a defined contribution
plan in line with the requirements of IPSAS 39 Employee Benefits. WIPO’s contributions to the Fund during thefinancial period are recognized as expenses in the Statement of Financial Performance.

LeasesFinance leases are recognized as assets and liabilities in the statement of financial position at the lower of the fairvalue of the leased item or the present value of the minimum lease payments at the commencement of the lease
term. The finance charge is charged to surplus or deficit over the lease period so as to produce a constant periodic
rate of interest on the remaining balance of the liability. The amount recognized as an asset is depreciated over its
useful life.
Operating lease payments are recognized as an expense on a straight-line basis over the lease term.

Provisions
Provisions are recognized when the Organization has a legal or constructive obligation as a result of a past event,whereby it is probable that an outflow of resources will be required to settle the obligation and where a reliable
estimate of the amount of the obligation can be made.

Net Assets
The Organization’s net assets represent the balance of its reserves, which include its Reserves (Accumulated
Surpluses, Special Projects Reserve and Revaluation Reserve Surplus) and Working Capital Funds. The
Organization also recognizes actuarial gains and losses directly through net assets. The Organization manages thelevel of its reserves in accordance with its Policy on Reserves.
The Accumulated Surpluses of the Organization represent the accumulated net result of operations in the reporting
year and prior periods after the impact of IPSAS. WIPO’s Policy on Reserves establishes the principles and approvalmechanism for the use of reserves for one-time projects for capital improvements and exceptional circumstances.
The Special Projects Reserve contains the appropriations to these projects financed from reserves, lessaccumulated expenditure. The Revaluation Reserve Surplus includes the cumulative results of revaluations of theland owned by the Organization on which the New Building has been constructed. The Working Capital Funds are
established for providing advances to finance appropriations should there be a temporary liquidity shortfall, and for
35

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

such other purposes as the Assemblies of Member States and of the Unions shall decide. The Working CapitalFunds are financed by contributions and are held in trust by WIPO for the Member States of the respective Unions.

Segment Reporting
Segment reporting is based upon the Unions that form WIPO. Revenue and expenses incurred by the Organization
are allocated among the Unions in accordance with an allocation methodology approved by the WIPO Assembly(Program and Budget 2020/21, Annex III). The methodology allocates revenue and expenses to each program andthen to each Union based on a combination of direct revenue and expense, staff head count and each Union’s“capacity to pay”. Direct Union expenses are allocated to Unions either fully or on the basis of estimates by Program
Managers. Direct administrative expenses are allocated to the Unions based on relative headcount shares. Indirect
Union expenses and indirect administrative expenses are allocated to the Unions based on the “capacity-to-pay”
principle. If the Union has a reserve level above its reserve target, it is deemed to be able to support indirect
activities. The “capacity to pay” is calculated as the difference between a Union’s projected biennial income and its
direct Union and direct administrative expenses. The extent to which this support can be provided by each Union is
calculated by considering the relative extent to which the Union’s income exceeds its direct expenditure. The onlyinter-segment charge represents the costs of program support incurred by the Unions in support of Special
Accounts. Program support costs are charged to the Special Accounts based on a percentage of total direct
expenditure specified in the agreement with the donor making the voluntary contribution. WIPO’s assets andliabilities are not allocated to individual segments, since ownership rests with the Organization as a whole, however,each Union’s share of the Organization’s net assets including Reserves and Working Capital Funds is recognized
by segment.

Use of Estimates
The financial statements necessarily include amounts based on estimates and assumptions by management.
Estimates include, but are not limited to: ASHI, repatriation grants and travel, and long-term accumulated annual
leave liabilities (the value of which are calculated by an independent actuary), other employee benefit liabilities,
provisions for litigation, financial risk on accounts receivable, accrued charges and the degree of impairment of
fixed assets. Actual results could differ from these estimates. Changes in estimates are reflected in the period inwhich they become known.
All balances are presented in thousands of Swiss francs, as a result small rounding differences may occur.

36

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

Note 3: Cash and Cash Equivalents
December 31,
2021

December 31,
2020(in thousands of Swiss francs)
Cash on hand41

31

Deposits with banks

47,71868,932

Term deposits less than 3 months

66,40437,920

Notice accounts

17,75626,022

Total operating and core cash

131,919

132,905

Deposits with banks

15,588

10,635

Total strategic cash

15,588

10,635

Total cash and cash equivalents

147,507

143,540

December 31,
2021

December 31,
2020

Note 4: Investments(in thousands of Swiss francs)

Term deposits more than 3 months (operating cash)

66,288116,000

Derivative financial instruments

3,175

116

Current investments

69,463

116,116

Medium term Investment portfolio (core cash)

675,881471,738Long term Investment portfolio (strategic cash)

221,616

200,606

Non-current investments

897,497672,344

Total investments

966,960

788,460

Derivative financial instruments are forward foreign exchange contracts. The movement in the value of operating
cash, core cash, and strategic cash investments during the year ended December 31, 2021 is as follows:
Operating cash
investmentsCore cash
investments

Strategic cash
investments(in thousands of Swiss francs)
Investments fair value at January 1, 2021

116,000

471,738

200,606

Additional investments made-192,374

14,615

Dividends on investments invested

-

2,314

1,232

Disposal of investments-49,712--4,030Forex gains/(losses) on investments

-

2,621

1,383

Fair value increase/(decrease)

-

6,834

7,810

66,288675,881

221,616

Investments fair value at December 31, 2021

37

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

Note 5: Receivables
December 31,
2021

December 31,
2020(in thousands of Swiss francs)
Assessed contributions

1,439

Voluntary contributions

1,547

2

-

Contributions receivable

1,441

1,547

PCT debtors

62,283

53,102Madrid debtors

130

201

Other receivables

9,752

7,735

Advances and prepayments

5,738

5,754

Loan to FIPOI

8,113

-

Exchange transactions receivable

86,016

66,792

Total accounts receivable

87,457

68,339Note: 2020 contributions receivable have been restated to reclassify 40 thousand Swiss francs from Working Capital Funds arrears to assessed
contributions.

Other receivables include USA taxes reimbursable, Swiss taxes reimbursable, UPOV expenditure reimbursable,credit card debtors and other debtors. Advances and prepayments include staff advances for education grants,
funds advanced to the United Nations Development Program and other prepaid expenditure.
The loan to the Foundation for Buildings for International Organizations (FIPOI) is due to be repaid to WIPO in
January 2022 following termination of WIPO’s lease of the building on rue des Morillons in Geneva, Switzerland(see Note 21 Events After the Reporting Date). WIPO advanced a total sum of 11.0 million Swiss francs for theconstruction of the building under a 1991 agreement with the International Centre of Geneva Foundation (FCIG).
In 2016 the FCIG was absorbed by law into the FIPOI. WIPO also entered into an agreement to lease the building
from FCIG (subsequently FIPOI). The lease agreement, which was most recently updated and signed by WIPO in
2019, included an annual amortization charge of 188,679 Swiss francs against WIPO’s advance to FIPOI. Under
the terms of the lease, following termination and upon vacating the premises, the balance of the 11.0 million Swiss
francs advance after amortization is due to WIPO. FIPOI also retains 1.0 million Swiss francs from the advance forrestoration of the building to its original condition. As a result, the balance of 8.1 million Swiss francs is due to WIPO
as at December 31, 2021.

38

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

Note 6: Intangible Assets
Movement 2021

Land surface
rightsSoftwareexternallyacquired

Softwareinternallydeveloped

Intangible
assets underdevelopment

Total(in thousands of Swiss francs)
January 1, 2021
Gross carrying amount

34,290

733

4,950

-

39,973

Accumulated amortization-10,917-733-4,295--15,945

23,373-655-

24,028Additions

-

39

-

1,078

1,117

Transfers

-

-

-

-

-

Disposals

-

-

-531

-

-531

Disposals amortization

-

-

131

-

131

-440

-

-180

-

-620

-440

39

-580

1,078

97

Net carrying amount
Movements in 2021

Amortization
Total movements in 2021
December 31, 2021
Gross carrying amount

34,290

772

4,419

1,078

40,559

Accumulated amortization-11,357-733-4,344--16,434

22,933

39

75

1,078

24,125Land surface
rightsSoftwareexternallyacquired

Softwareinternallydeveloped

Intangible
assets underdevelopment

Total

Net carrying amount

Movement 2020

(in thousands of Swiss francs)
January 1, 2020
Gross carrying amount

34,290

760

4,419

261

39,730

Accumulated amortization-10,477-703

23,81357-4,089--15,269330

261

24,461

Additions--

Transfers

-

-

270

-

270

261

-261

-

Disposals-

Disposals amortization

-

-27

-

-

-27

27

-

-

27

-440

-57

-206

-

-703

-440

-57

325

-261

-433

Gross carrying amount

34,290

733

4,950

-

39,973

Accumulated amortization-10,917-733-4,295--15,945

23,373-655-

24,028Net carrying amount
Movements in 2020

Amortization
Total movements in 2020
December 31, 2020

Net carrying amountLand surface rights to parcel 4008 in Petit-Saconnex in the City of Geneva were acquired from the World
Meteorological Organization (WMO) in 1996. These had been granted to WMO by the Republic and Canton of
Geneva. At the date of purchase the original rights had a remaining period of 78 years expiring in 2073, unlessrenewed by the Canton. WIPO has been granted surface rights by the Republic and Canton of Geneva to the landon which the Árpád Bogsch and Georg Bodenhausen buildings are located. These surface rights were acquired by
the Organization at no cost and no value has been recognized in the financial statements as the Organization does
not have the right to dispose of the rights.

39

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

Note 7: Property, Plant and Equipment
Movement 2021

Buildings

Land

Equipment

Total(in thousands of Swiss francs)

January 1, 2021
Gross carrying amount402,745

33,922

6,688

Accumulated depreciation-80,154--4,710-84,864

322,591

33,922

1,978

358,491

1,535

-

213

1,748

Revaluation

-

-

-

-

Disposals

-

-

-204

-204

Net carrying amount

443,355

Movements in 2021
Additions

Disposals depreciation

-

-

204

204

-8,517--467-8,984-6,982--254-7,236Gross carrying amount404,280

33,922

6,697

444,899

Accumulated depreciation-88,671--4,973-93,644

315,60933,922

1,724

351,255

Buildings

Land

Equipment

Total

Depreciation
Total movements in 2021
December 31, 2021

Net carrying amount

Movement 2020

(in thousands of Swiss francs)

January 1, 2020
Gross carrying amount
Accumulated depreciation
Net carrying amount

401,28132,086

7,776-71,715--5,889-77,604

329,566

32,086

1,887

363,5392,722

441,143

Movements in 2020
Additions

1,817

-

905

Revaluation

-

1,836

-

1,836

Disposals-353--1,993-2,346

Disposals depreciation

164

-

1,646

1,810

-8,603--467-9,070-6,975

1,836

91-5,048Gross carrying amount402,745

33,922

6,688

443,355

Accumulated depreciation-80,154--4,710-84,864

322,591

33,922

1,978

358,491

Depreciation
Total movements in 2020
December 31, 2020

Net carrying amount

WIPO holds fully depreciated equipment which is still in use for a gross carrying amount of 3.5 million Swiss francs.
The land upon which the New Building was constructed was initially acquired by the Organization at a cost of 13.6
million Swiss francs in 1998, but is held at fair value based on International Valuation Standards as determined byan independent appraiser. The net result of all periodic revaluations totalling 20.4 million Swiss francs is includedin the Revaluation Reserve Surplus which forms part of WIPO’s net assets. The most recent valuation of the land
was performed by an independent appraiser at December 31, 2020. Market value was estimated by capitalizing at
an appropriate investment yield the future potential income stream from the property. The potential income wasbased on comparable rentals in the market, taking into account the quality of the spaces as well as the location.

40

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

The yield was selected by reference to the perceived quality and duration of the income and the potential for further
rental growth and was cross-referenced by the evidence provided by comparable sales. For 2021 a review was
performed of available market data, including Geneva office rentals, to ensure that an update of the 2020 valuation
would not result in a material change in the fair value of the land.
WIPO holds heritage assets, referred to as works of art, representing items donated or loaned to the Organization
by representatives or officials of Member States or other public or private entities or individuals. The works of art
held by WIPO include paintings, sculptures, decorative objects, historical documents and other items. As at
December 31, 2021, the Organization held a total of 685 items classified as works of art. WIPO has elected not torecognize works of art as assets in the Statement of Financial Position, in accordance with IPSAS 17. The 685
items are classified as follows:
Number of Works of Art

2021

2020

Framed artwork

188

171

Decorative objects

103

80

Sculptures

76

78

Other commemorative objects

49

28

Furniture38

38

Tapestries/carpets

34

33

Primitive arts

23

21

Ceramic/porcelain

22

20

Silverware

20

18

Other works of art

132

105

Total

685

592

Under the WIPO Policy on Property Management and the related Property Management Manual, the Organization
has established processes and procedures for the management of works of art, including the final determination as
to whether an item is deemed to be a work of art. Works of art are held in controlled access storage until such time
as a decision is taken in relation to the placement of an item. Most of the small and fragile works of art are stored
in closed cabinets. The dedicated storage is currently being improved to enhance protection from dust and possible
water damage. In addition, works of art placed in lobbies, offices and on office floors in WIPO’s buildings benefit
from existing security measures. All works of art are recorded in the Asset Management Module of WIPO’s ERP
system, and are included in the Organization’s annual physical inventory process. Formal confirmations that works
of art are held by WIPO are provided to donors upon request.

Note 8: Other Non-Current Assets
December 31,
2021

December 31,
2020(in thousands of Swiss francs)
Loan to FIPOI

-

7,995

Total other non-current assets

-

7,995

As at December 31, 2021, the loan to FIPOI was due to be repaid to WIPO in January 2022 and was therefore
reclassified as a current asset at that date (see Note 5 Receivables and Note 21 Events After the Reporting Date).

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WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

Note 9: Payables and Accruals
December 31,
2021

December 31,
2020(in thousands of Swiss francs)
Trade creditors - accounts payable

18,383

Miscellaneous transitory liabilities

656

42

Other trade creditors

507

429

19,546

15,531

Total payables and accruals

15,060

Payables and accruals include invoices received from suppliers not yet settled including the revaluation of invoices
payable in currencies other than the Swiss franc.

Note 10: Employee Benefits
December 31,
2021

December 31,
2020(in thousands of Swiss francs)
Accumulated leave (posts)

1,594

2,034

Accumulated leave (temporary staff)

417

498

Separation benefits

380

306

Closed Pension Fund

315

312

Repatriation grant and travel

2,515

2,496

Home leave

1,544

1,470

31

66

2,080

1,869

Overtime and credit hours
Education grant
Performance rewards

427

443

After-Service Health Insurance

6,706

4,911

Total current employee benefit liabilities

16,00914,405

Closed Pension Fund

2,332

2,849

Accumulated leave (posts)

18,69818,711

Repatriation grant and travel

11,738

11,532After-Service Health Insurance

567,017447,844

Total non-current employee benefit liabilities

599,785

480,936

Total employee benefit liabilities

615,794495,341

Long-term employee benefits include After-Service Health Insurance (ASHI), repatriation grant and travel, andaccumulated leave (posts):
ASHI: Staff members (and their spouses, dependent children and survivors) retiring from service are eligible for
After-Service Health Insurance (ASHI) coverage if they continue to participate in the collective medical insurance
plan after separation from service. In accordance with WIPO’s SRR, a share of 65 per cent of the monthly medical
insurance premium is paid by the Organization. From January 1, 2022, monthly medical premiums amount to 625.80
Swiss francs for adults and 278.00 Swiss francs for children.
Repatriation grant and travel: The Organization has a contractual obligation to provide benefits such as
repatriation grants, travel and removal for certain internationally recruited staff members at the time of theirseparation from service
Accumulated leave (posts): Accumulated annual leave is classified as a long-term employee benefit for staff
members holding permanent, continuing or fixed term contracts. Staff in posts may accrue up to 15 days of annual
leave in a given year, and a total accumulated balance of 60 days. Due to the COVID-19 pandemic exceptional
measures were introduced to allow the accrual of up to 20 days annual leave in 2020, and a total accumulated

42

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

balance of 80 days to be carried forward to 2021. These measures were reversed for the year ended 31 December,
2021. On separation from service, staff in posts who have accumulated annual leave can receive a payment in lieu
of an amount equivalent to their salary for the period of accumulated annual leave, up to a maximum of 60 days.
Employee benefit liabilities for ASHI, repatriation grant and travel, and accumulated leave (posts) are calculated byan independent actuary. Actuarial assumptions have a significant effect on the amounts calculated for employee
benefit liabilities. A description of the factors which impact the size of the ASHI liability is included in the financial
statement discussion and analysis which precedes these financial statements. The principal actuarial assumptions
applied in determining these liabilities are detailed below. Discount rates were determined using AA Corporate Bond
Yield Curves:
December 31, 2021

December 31, 2020

0.50%

0.30%

Discount rate currency

CHF, EUR, USD (weighted)

CHF, EUR, USD (weighted)

Medical cost trend rate

2.50%

After-Service Health Insurance
Discount rate

Annual medical claims cost (by age):

2.90%

Claims cost CHF

Age grading

Claims cost CHF

Age grading

50

5,088

N/A

2,189

10.00%

55

5,673

N/A

3,525

10.00%

60

6,639

N/A

5,677

8.00%

65

8,800

N/A

8,342

4.00%

70

10,387

N/A

10,1492.00%

75

11,353

N/A

11,2051.00%

80

15,319N/A

11,7760.00%

85

15,781

N/A

11,776

0.00%

Repatriation Grant and Travel
Discount rate

2.60%

2.10%

Discount rate currency

USD

USD

Rate of s alary increase

2.70%

2.78%

0.20%

0.00%

Accumulated leave (posts)
Discount rate
Discount rate currency
Rate of s alary increase

CHF
Comprised of:

CHF
Comprised of:Inflation

0.90%

Inflation

Productivity

0.50%

Productivity

0.50%

Merit scale

0.97%-6.07%

Merit scale

0.97%-6.07%

1.00%

The present value of the defined benefit obligations for ASHI is determined using the projected unit credit method
including discounting the estimated future cash outflows. In accordance with IPSAS the Organization’s ASHI liability
is considered as unfunded as no plan assets are held in a legally separate entity or fund, and therefore no plan
assets are deducted from the liability as recognized in the Statement of Financial Position. However, it should be
noted that the Organization has established separate funds (strategic cash) for the future financing of after-service
employee benefit liabilities. The table below details the expense for ASHI recognized in the Statement of Financial
Performance:
December 31,
2021

December 31,
2020(in thousands of Swiss francs)
Interest cost

1,351

1,559

Current service cost
Expense recognized in the Statement of Financial
Performance

36,15426,55937,505

28,11843

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

The table below details the changes in the ASHI defined benefit obligation, including the impact of actuarial
gains/(losses):
December 31,
2021

December 31,
2020(in thousands of Swiss francs)
Defined benefit obligation at beginning of year

452,755

313,694

Interest cost

1,351

1,559

Current service cost

36,15426,559Contribution paid

-4,017-3,928Experience (gain)/loss-4,4302,400

Medical cost trend rate

-54,819-9,234

Discount rate

-25,997

19,668(Gain)/loss on change in financial assumptions-80,816

10,434

Medical claims cost

179,579

106,499

Actuarial (gain)/loss on obligation:

Other demographic assumptions-6,853-4,462(Gain)/loss on change in demographic assumptions

172,726

102,037

Defined benefit obligation recognized at end of year

573,723452,755

As can be seen in the table above, the most significant movement in the 2021 ASHI liability was the result of
actuarial losses from changes to the medical claims cost assumption. For the 2021 liability calculation, theindependent actuary performed a detailed analysis of claims cost data, and from this generated an updated
assumption derived from actual medical claims to better reflect the cost of providing post-employment medical
benefits. This move to a calculation based on detailed medical claims data also means WIPO’s share of ASHI costs
increases from 65 per cent to 73 per cent. This reflects the assumption that while retiree contributions remain
consistent at 35 per cent of medical insurance premiums, they represent a proportionally lower share of actual postemployment medical costs. For the 2020 calculation, the medical claims cost assumption was derived from the
medical insurance premiums by applying an age-specific grading factor. No specific modifications were made to
any of the 2020 or 2021 actuarial assumptions, including those related to medical claims or mortality rates, as aresult of the COVID-19 pandemic. Contributions, representing the premium share paid by the Organization for ASHI,
totaled 4.0 million Swiss francs for 2021 (3.9 million Swiss francs in 2020). Expected contributions to ASHI in 2022,
representing medical claims costs, are 6.7 million Swiss francs. The weighted average duration of the defined
benefit obligation as at December 31, 2021, was 22 years. The following table details the present value of thedefined benefit obligation and experience adjustments on the ASHI liability for 2021 and the previous four years.
2021

2020

2019

2018

2017

(in thousands of Swiss francs)
Defined benefit obligation

573,723452,755

313,694

303,128

304,376-4,4302,400-37,983-3,092-17,122

Experience (gain)/loss adjustments on plan liability

The following sensitivity analysis shows how the defined benefit obligation would have been affected by changes
in significant actuarial assumptions, the discount rate and the rate of sickness premium increase. The per centchanges used in the analysis are considered reasonable based on historical movements:
0.25 per cent decreasein discount rate
0.25%
Defined benefit obligation as at
December 31, 2021
Per cent variation

Defined benefit obligation as at
December 31, 2021
Per cent variation

606,464

Discount rate as
applied0.50%(in thousands of Swiss francs)
573,723

0.25 per cent increasein discount rate
0.75%
543,298

5.7%

-5.3%

1 per cent decrease in
medical cost trend rate
1.50%

Medical cost trend rate
1 per cent increase in
as applied
medical cost trend rate
2.50%
3.50%
(in thousands of Swiss francs)

467,318-18.5%

44573,723

712,403
24.2%

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

United Nations Joint Staff Pension Fund
The Fund’s Regulations state that the Pension Board shall have an actuarial valuation made of the Fund at least
once every three years by the Consulting Actuary. The practice of the Pension Board has been to carry out anactuarial valuation every two years using the Open Group Aggregate Method. The primary purpose of the actuarial
valuation is to determine whether the current and estimated future assets of the Pension Fund will be sufficient tomeet its liabilities.
WIPO’s financial obligation to the Fund consists of its mandated contribution, at the rate established by the United
Nations General Assembly (currently at 7.9 per cent for participants and 15.8 per cent for member organizations)
together with any share of any actuarial deficiency payments under Article 26 of the Regulations of the Fund. Such
deficiency payments are only payable if and when the United Nations General Assembly has invoked the provisionof Article 26, following determination that there is a requirement for deficiency payments based on an assessmentof the actuarial sufficiency of the Fund as of the valuation date. Each member organization shall contribute to thisdeficiency an amount proportionate to the total contributions which each paid during the three years preceding thevaluation date.
The latest actuarial valuation for the Fund was completed as at December 31, 2019, and the valuation as at
December 31, 2021 is currently being performed. A roll forward of the participation data as at December 31, 2019
to December 31, 2020 was used by the Fund for its 2020 financial statements.
The actuarial valuation as at December 31, 2019, resulted in a funded ratio of actuarial assets to actuarial liabilities,
assuming no future pension adjustments, of 144.4 per cent. The funded ratio was 107.1 per cent when the current
system of pension adjustments was taken into account.
After assessing the actuarial sufficiency of the Fund, the Consulting Actuary concluded that there was norequirement, as at December 31, 2019, for deficiency payments under Article 26 of the Regulations of the Fund as
the actuarial value of assets exceeded the actuarial value of all accrued liabilities under the plan. In addition, themarket value of assets also exceeded the actuarial value of all accrued liabilities as of the valuation date. At thetime of this report, the General Assembly has not invoked the provision of Article 26.
Should Article 26 be invoked due to an actuarial deficiency, either during the ongoing operation or due to thetermination of the Fund, deficiency payments required from each member organization would be based upon the
proportion of that member organization’s contributions to the total contributions paid to the Fund during the three
years preceding the valuation date. Total contributions paid to the Fund during the preceding three years (2018,2019 and 2020) amounted to 7,993.15 million US dollars, of which 1.67 per cent was contributed by WIPO (including
participants and Organization contributions).
During 2021, WIPO contributions (including Organization contributions only) paid to the Fund amounted to 28.9
million Swiss francs (29.0 million Swiss francs in 2020). Expected contributions due in 2022 are approximately 29.2
million Swiss francs.
Membership of the Fund may be terminated by decision of the United Nations General Assembly, upon theaffirmative recommendation of the Pension Board. A proportionate share of the total assets of the Fund at the dateof termination shall be paid to the former member organization for the exclusive benefit of its staff who wereparticipants in the Fund at that date, pursuant to an arrangement mutually agreed between the organization andthe Fund. The amount is determined by the Pension Board based on an actuarial valuation of the assets andliabilities of the Fund on the date of termination; no part of the assets which are in excess of the liabilities is includedin the amount.
The United Nations Board of Auditors carries out an annual audit of the Fund and reports to the Pension Board andto the United Nations General Assembly on the audit every year. The Fund publishes quarterly reports on its
investments and these can be viewed by visiting the Fund at www.unjspf.org.

45

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

Note 11: Transfers Payable
December 31,
2021

December 31,
2020(in thousands of Swiss francs)
Madrid Union fees

64,57560,759Madrid Union deposits

32,70826,443

Hague Union distribution

847

792

Madrid and Hague Union repartition fees

5,256

6,254

AMC deposits

1,730

1,083

PCT International Searching Authorities

1,782

1,880

497

1,017

RO search fees due to International Searching Authorities
Lisbon Union fees
Total transfers payable

16-

107,411

98,228The Organization collects fees on behalf of the contracting parties of the Madrid Agreement and Protocol and theCommon Regulations of the Hague Agreement. The Organization’s PCT International Bureau collects funds fromapplicants to cover the cost of payments of International Searching Authorities. In addition, the Organization collects
fees to be paid directly to mediators, arbitrators or panelists for cases treated through the Arbitration and Mediation
Centre. The Organization holds these funds on a temporary basis until they are transferred to the final beneficiaryin accordance with the various treaties and agreements administered by the Organization.

Note 12: Advance Receipts
December 31,
2021

December 31,
2020(in thousands of Swiss francs)
Madrid Union deposits

8,632

7,604

Industrial design deposits

2,560

1,970

395

76

Lisbon Union deposits
PCT/IBRO deposits

721

413

4,992

4,061

PCT system deferred revenue

299,149

286,078

Madrid system deferred revenue

2,661

2,597

Hague system deferred revenue

452

423

Non-exchange deferred revenue

15,967

14,556FIPOI deferred revenue

59

59

Other deferred revenue

94

335,597

317,841FIPOI deferred revenue

3,578

3,637

Total non-current advance receipts

3,578

3,637

339,175

321,478

Advance payment of contributions

Total current advance receipts

Total advance receipts

46

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

Note 13: Provisions(in thousands of Swiss francs)
Balance as at December 31, 2019

1,811

Movements in 2020
Additional provisions made15

Amounts used

-833

Unused amounts reversed-7

Balance as at December 31, 2020

986

Movements in 2021
Additional provisions made167

Amounts used

-487

Unused amounts reversed-174

Balance as at December 31, 2021

492

Provisions at December 31, 2021, include cases where WIPO personnel are in dispute with the Organization, before
the WIPO Appeal Board (WAB) and the ILO Administrative Tribunal (ILOAT).

Note 14: Contingent Assets and Liabilities
The estimated value of contingent liabilities for possible payments by the Organization for claims arising from cases
before the WIPO Appeal Board (WAB) and the ILO Administrative Tribunal (ILOAT) is 257,300 Swiss francs at thereporting date.
The International Computing Centre (ICC) was established in January 1971 pursuant to Resolution 2741 (XXV) of
the United Nations General Assembly. ICC provides Information Technology and Communications services toPartners and Users in the United Nations System. As a Partner bound by the Mandate of the ICC, WIPO would be
proportionately responsible for any third party claim or liability arising from or related to service activities of the ICC
as specified in the ICC Mandate. At 31 December 2021, there are no known claims that impact WIPO. Ownershipof assets is with ICC until dissolution. Upon dissolution, the division of all assets and liabilities amongst Partner
Organizations shall be agreed by the Management Committee by a formula defined at that time.

47

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

Note 15: Leases
WIPO as Lessee
The Organization leases depots and storage facilities, office space, and printing and photocopying equipment underoperating lease arrangements. The total amount of lease payments under these arrangements recognized as an
expense was 1.7 million Swiss francs in 2021 (1.6 million Swiss francs in 2020). In 2021, the Organization
terminated its lease of the building on rue des Morillons in Geneva, Switzerland. The annual lease cost for thisbuilding was approximately 0.4 million Swiss francs. The value of future minimum lease payments under noncancellable operating leases is shown in the table below:
Operating Leases

December 31,
2021

December 31,
2020(in thousands of Swiss francs)
Not later than one year

480

854

Later than one year and not later than five years

169

647

-

-

649

1,501

Later than five years
Total minimum lease payments

The Organization leases equipment under a finance lease arrangement. At the reporting date the net carrying
amount of equipment held under finance leases is 0.4 million Swiss francs. The total value of future minimum lease
payments under finance leases, and their present value, are shown in the table below:
Finance Leases

December 31,
2021

December 31,
2020(in thousands of Swiss francs)
Not later than one year

177

163

Later than one year and not later than five years

368

504

-

-

Total minimum lease payments

545

667

Future finance charges

-92

-148

Present value of minimum lease payments

453

519

Later than five years

WIPO as Lessor
The Organization has entered into a number of agreements whereby it leases space in or on its headquarters
buildings to third parties. These leases are all cancellable by WIPO subject to notification periods specified in theagreements. The total amount of rental income from these arrangements was 0.6 million Swiss francs in 2021 (0.6
million Swiss francs in 2020).
Operating Leases

December 31,
2021

December 31,
2020(in thousands of Swiss francs)
Not later than one year

359

367

Later than one year and not later than five years

57

63

Later than five years

-

-

416

430

Total minimum lease payments

48

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

Note 16: Related Party Transactions
2021

2020

Number of
Individuals

Aggregate
remuneration

Number of
Individuals

Aggregate
remuneration(full-time
equivalent basis)(in thousands of
Swiss francs)(full-time
equivalent basis)(in thousands of
Swiss francs)

Director General, Deputies and Assistants

9.00

3,349

8.75

3,268

Senior Officers

11.25

3,574

14.50

4,167

Total remuneration of CHF 207,140 was provided to close family members of key management personnel who were
employed by WIPO during the year.
WIPO is governed by the WIPO General Assembly composed of representatives of Member States party to the
WIPO Convention which are members of any of the Unions. These representatives do not receive remunerationfrom WIPO. WIPO is managed by a Director General and by Deputy and Assistant Directors General and officers(key management personnel) who are remunerated by the Organization. The aggregate remuneration paid to key
management personnel includes salaries, allowances, statutory travel and other entitlements paid in accordancewith the Staff Regulations and Rules, and applicable to all staff. In addition, the Director General, Deputy Directors
General and Assistant Directors General receive representation allowances. Key management personnel are
members of the UNJSPF to which the personnel and WIPO contribute and are also eligible for participation in thecollective medical insurance plan. Key management personnel and their aggregate remuneration are detailed in
the table above. There were no loans to key management personnel or to their close family members which were
not available to other categories of staff. There was no other remuneration or compensation to key management
personnel or to their close family members.
WIPO has no controlled entities and no interests in other entities which would require disclosure under IPSAS 3438. WIPO is a member of the UNJSPF and certain of its former staff are members of WIPO’s CROMPI. WIPO hasa relationship with the International Union for the Protection of New Varieties of Plants (UPOV) whereby the Director
General of WIPO serves as Secretary General of UPOV. The office of UPOV exercises its functions in complete
independence of WIPO. WIPO is responsible for providing space, personnel administration, financial administration,
procurement services and other administrative support to UPOV in accordance with the terms of an agreement
between WIPO and UPOV dated November 26, 1982. UPOV reimburses WIPO for the cost of such services inaccordance with the terms of said agreement. In 2021 WIPO received 618 thousand Swiss francs from UPOV tocover the cost of these services. In addition, WIPO receives reimbursement of funds disbursed on behalf of UPOV.

49

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

Note 17: Reconciliation of Statement V and Statement II
The WIPO Program and Budget is established on a modified accrual basis in accordance with the Financial
Regulations and Rules, and is approved by the Assemblies of the Member States. WIPO’s budget is adopted by
the Assemblies on a biennial basis, however, separate estimates are prepared for each of the two annual periods.
The Program and Budget for the 2020/21 Biennium established a budget for the biennium of expenditure of
768.4 million Swiss francs. The WIPO Performance Report for 2020/21 provides an explanation of both the changes
between the original and final budget after transfers, and the material differences between the budget and the actual
amounts. WIPO’s budget and financial accounts are prepared using two different bases. The Statement of Financial
Position, Statement of Financial Performance, Statement of Changes in Net Assets and Statement of Cash Flow
are prepared on a full accrual basis, whereas the Statement of Comparison of Budget and Actual Amounts(Statement V) is prepared on a modified accrual basis. As required by IPSAS 24, reconciliation is provided between
the actual amounts on a comparable basis as presented in Statement V and the actual amounts in the financial
accounts identifying separately any basis, timing and entity differences.
Reconciliation for the year 2021
Operating

Investing

FinancingTotal(in thousands of Swiss francs)
Actual amount on comparable basis (Statement V)

143,697--

143,697-9,604---9,604

Capitalization/disposal PPE and intangible assets

-

2,465

-

2,465

Finance lease adjustments

-

-

65

65

-15,651---15,651

Depreciation and amortization

Changes in employee benefit liabilities
Change in allowance for receivables

-57

-

-

-57

Special Accounts revenue recognition-1,469

---1,469Total Basis differences-26,7812,465

65-24,251

Projects financed from reserves-12,076---12,076

1,544

-

-

1,544

Total Entity differences-10,532---10,532

Actual amount in the Statement of Financial
Performance (Statement II)

106,3842,465

65

108,914

Operating

Investing

Financing

Total

Special Accounts

Reconciliation for the biennium 2020/21(in thousands of Swiss francs)
Actual amount on comparable basis (Statement V)

312,182

Depreciation and amortization
Capitalization/disposal PPE and intangible assets
Finance lease adjustments
Changes in employee benefit liabilities
Change in allowance for receivables--

312,182-19,377---19,377

-

4,921

-

4,921

-

-

-453

-453

-30,270---30,270

2

-

-

2

Special Accounts revenue recognition-5,089---5,089Total Basis differences-54,734

4,921

-453

-50,266

Projects financed from reserves-22,295---22,295

5,164

-

-

5,164

Total Entity differences-17,131---17,131

Actual amount in the Statement of Financial
Performance (Statement II)

240,317

4,921

-453

244,785

Special Accounts

50

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

Note 18: Expenses

2021

2020

(in thousands of Swiss francs)

Posts

235,231

223,447

Temporary staff

8,862

8,493

Other staff costs

538

1,795

244,631

233,735

Total Personnel expenditure
Internships

388

519

WIPO fellowships

5,308

4,959

Total Interns and WIPO fellowships

5,696

5,478

Staff missions

68

536

Third-party travel

661

549

Training and related travel grant

735

687

Total Travel, training and grants

1,464

1,772

Conferences

2,269

1,348

Publishing

15

32

Individual contractual services

16,243

12,285

Other contractual services

81,30074,954

Total Contractual services

99,827

88,619Premises and maintenance

21,32018,499Communication

1,098

1,274

Representation and other operating expenses

1,096

587

United Nations joint services

489

513

Total Operating expenses

24,003

20,873

Supplies and materials

3,247

4,866

Furniture and equipment

182

474

Equipment and supplies

3,429

5,340

Depreciation and amortization

9,604

9,773

244

240

388,898

365,830

Finance costs
Total expenses

Note: 2020 personnel expenditure has been restated to reclassify 97 thousand Swiss francs from posts to other staff costs.

51

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

Note 19: Investment Gains/(Losses)
2021

2020

(in thousands of Swiss francs)
Fair value increase/(decrease) on investments

14,64433,280

Dividends

5,464

4,944

Interest on current accounts and deposits

-19

-4

Interest on investments-5

4Investment management and administration cost

-572

-446

Exchange gain (loss) on investments

4,004-10,168

Exchange gain (loss) on derivative financial instruments

-803

5,819

22,71333,429Total investment gains/(losses)

The fair value increase on investments of 14.6 million Swiss francs represents movements in the valuation of theOrganization’s core cash and strategic cash portfolio assets at the reporting dates.

Note 20: Financial Instruments
Financial Instruments Overview
Financial instruments are categorized as follows:
Financial Assets and Liabilities

Category

Cash and cash equivalents

Amortized cost

Receivables

Amortized cost

Loans

Amortized cost

Payables and accruals

Amortized cost

Transfers payable

Amortized cost

Current accounts

Amortized cost

Derivative assets and liabilities

Fair value through surplus and deficit

Short-term investments arising from operating cash

Fair value through surplus and deficit

Held to maturity investments arising from operating cash

Amortized cost

Investments arising from core and strategic cash

Fair value through surplus and deficit

The carrying amounts of the categories of financial assets and liabilities are as follows:
December 31,
2021

December 31,
2020(in thousands of Swiss francs)
Financial assets
Amortized cost

295,514

Fair value through surplus and deficit

900,672

672,460

1,196,186

1,002,580

Amortized cost

213,346

185,881

Total carrying value

213,346

185,881

Total carrying value

330,120

Financial liabilities

52

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

The Organization is exposed to certain foreign currency exchange, credit, interest rate, price and liquidity risks
which arise in the normal course of its operations. This note presents information about the Organization’s exposure
to each of the above risks and the policies and processes for measuring and managing risk.
The Organization manages its investments in accordance with its Policy on Investments. The policy contains two
specific investment policies, one covering operating and core cash and a second one covering strategic cash.
Operating cash is the cash required by the Organization to meet daily payment requirements and to ensure that an
amount equivalent to the target reserves is available in liquid assets. Core cash is the balance of cash remaining
once operating and strategic cash have been deducted. Strategic cash is the cash which has been set aside tofinance after-service employee benefit liabilities, including ASHI.
Fair Values
The fair value of the financial assets and liabilities are included at the amount at which the instrument could beexchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The following
methods and assumptions were used to estimate the fair values:Cash and short-term deposits, receivables from exchange transactions, accounts payable and other current
liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments;
Quoted investments (in investment funds which are publicly traded) are based on price quotations at thereporting date;
Derivative financial instruments are based on quoted prices, adjusted for the UNORE at reporting date;
Loans and receivables are evaluated by the Organization based on parameters such as interest rates and risk
characteristics.

For WIPO’s financial assets and liabilities at the reporting date, the carrying amount is equivalent to the fair value.
Fair Value Hierarchy
For those instruments categorized as fair value through surplus or deficit, fair values are classified according to thefollowing hierarchy:

Quoted prices (unadjusted) in active markets for identical assets and liabilities (Level 1);
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly or indirectly (Level 2);
Inputs for the asset or liability that are not based on observable market data (Level 3).
Financial Assets and Liabilities

Fair Value Hierarchy

Cash and cash equivalents

Level 1

Derivative assets and liabilities

Level 2

Investments arising from core and strategic cash

Level 1Credit Risk
Credit risk is the risk of financial loss to the Organization if counterparties to financial instruments fail to meet theircontractual obligations, and it arises principally from the Organization’s loans, receivables, cash and cash
equivalents, and investments. The carrying amount of financial assets represents the maximum credit exposure.
For the purposes of financial reporting, WIPO calculates expected credit losses allowances associated with its
financial assets.
The Organization’s receivables from non-exchange transactions are almost exclusively from its Member States
representing sovereign governments, and therefore risks related to credit are considered minor. An allowance has
been established against the asset value of accounts receivable to reflect receivables for which payment is not
anticipated in the short-term. The allowance covers amounts due from Member States that have lost the right tovote under Article 11, paragraph 5 of the WIPO Convention and contributions from least developed countries whichhave been frozen by action of the Assemblies in 1989 and 1991.
In accordance with the Organization’s Policy on Investments, deposits may only be held with institutions with aminimum short-term credit rating of A-2/P-2 or a minimum long-term credit rating of A/A2. Money market
investments, bonds, notes or other obligations and other fixed income products purchased directly by WIPO may
only be held with institutions with a minimum short-term credit rating of A-3/P-3 or a minimum long-term credit ratingof BBB-/Baa3. Where these are acquired as shares in pooled market traded funds, at least 65 per cent of theportfolio holdings must be in Investment Grade (AAA/Aaa to BBB-/Baa3), while the balance of up to 35 per cent
may be held in high yield bonds (BB+/Ba1 to C/Ca). The credit ratings attached to cash and cash equivalents andinvestments as at December 31, 2021, is as follows:

53

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

Short-Term Credit Rating

A-1+

December 31, 2021
Cash and cash equivalents
Investments

Per cent

A-1

A-2/P-2

Unrated(1)

Total(in thousands of Swiss francs)
532

146,516418

41147,507-

66,288-897,497

963,785532

212,804

418

897,538

1,111,292

0.0%

19.2%

0.0%

80.8%

100.0%(1) Unrated balances include cash on hand and non-current investments. Non-current investments held by WIPO are in investment funds which are
not rated by credit rating agencies, but in which the underlying investments are made in accordance with WIPO’s Policy on Investments.

Liquidity Risk
Liquidity risk is the risk of the Organization not being able to meet its obligations as they fall due.
The Organization does not have significant exposure to liquidity risk as it has substantial unrestricted cash
resources which are replenished from the results of its operations. The Organization’s Policy on Investments
requires that operating and core cash are invested in such a way to ensure the liquidity necessary to meet theOrganization’s cash flow requirements. Operating cash balances are invested over the short term (periods notexceeding twelve months to maturity) in low-risk asset classes which are easily liquidated at little or no cost. Core
cash balances are invested with the objective of generating a positive return over rolling five-year periods. Core
cash balances are invested ideally in such a way that occasional access to a portion of the cash is possible.
Strategic cash balances are invested over the long term, and currently have no short or medium term liquidity
requirements.
Currency Risk
The Organization receives revenue from fees in currencies and incurs expenses in currencies other than its
functional currency, the Swiss franc, and is exposed to foreign currency exchange risk arising from fluctuations ofcurrency exchange rates. For PCT international filing fees, WIPO establishes equivalent amounts in currencies
other than the Swiss franc, which can be reset during the year if the exchange rate between the other currency andSwiss franc is 5.0 per cent or more for more than four consecutive Fridays. The Organization is also exposed to
exchange risk arising from the currency differences between amounts payable to International Searching Authorities(ISAs) pursuant to the Regulations under the Patent Cooperation Treaty and amounts received by national patentoffices for international search fees from applicants for international patents. The Organization also operates theWIPO Fee Transfer Service, a netting structure that reduces the exposure of PCT fee income to movements incurrency exchange rates with regard to search fees.
Where investments are held in currencies other than the Swiss franc, the Organization may use derivative financial
instruments to minimize the risk arising from the fluctuation of the currency of the investment against the Swiss
franc. Investment in derivatives for speculative purposes is not permitted. As at December 31, 2021, theOrganization held US dollar and Euro investments totaling 144.0 million Swiss francs and 10.4 million Swiss francs
respectively. The sensitivity of these investments to exchange rate fluctuations is monitored, and derivative financial
instruments are used to minimize this risk.
The Organization’s contributions to the UNJSPF and its payments to ICC are made in US dollars. The Organization
has a further exposure to exchange risk in connection with the cost of pensions for staff previously enrolled in the
Closed Pension Fund who are now members of the UNJSPF. In addition, the Organization has external offices inAlgeria, Brazil, China, Japan, Nigeria, Russia and Singapore, and a coordination office in the USA, with limited
assets in local currency.
Market Risk
Market risk is the risk of changes in market prices, including interest rates, affecting the Organization’s income or
the value of its financial instrument holdings. Investment revenue in the Organization’s budget for the 2020/21
Program and Budget is limited to interest on operating cash balances. The Organization does not currently use
financial instruments to hedge interest rate risk. WIPO’s medium-term investment portfolio (core cash) and longterm investment portfolio (strategic cash) are subject to the risk of movements in market prices of the underlying
investment funds. Based on historical experience for the investment strategies applied to these portfolios, theexpected volatility for core cash and strategic cash is 4.20 per cent and 5.80 per cent respectively.

54

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

Note 21: Events After the Reporting Date
WIPO’s reporting date is December 31, 2021 and its financial statements were authorized for issue on the samedate as the External Auditor’s opinion.
On January 25, 2022, the Organization received in full the remaining balance of 8.1 million Swiss francs of its loan
to the Foundation for Buildings for International Organizations (FIPOI). This repayment was due to WIPO following
termination of WIPO’s lease of the building on rue des Morillons in Geneva, Switzerland.
There have been no other material events, favourable or unfavourable, that occurred between the reporting date
and the date when the financial statements were authorized for issue that would have had a material impact onthese financial statements.

Note 22: Segment Reporting
Segment reporting is presented in a format which represents the various Unions as the segments that make up
WIPO. The Unions were created by the various treaties administered by WIPO.
The segment reporting table is shown on the next page and should be read in conjunction with the following
explanatory notes:










Note 1: The Madrid Union has assumed the financing of the Hague Union’s contribution of 3 million Swiss
francs to the IT Modernization Program of the Madrid and Hague international registration systems. The amountwill be reimbursed by the Hague Union to the Madrid Union as soon as the level of reserves of the Hague
Union Reserve Fund so allows.
Note 2: In accordance with the decision of the Assemblies of the Member States of WIPO at their 55 th Seriesof Meetings in 2015, the Contribution-financed Unions have assumed the financing of the deficit of the Lisbon
Union in the biennium 2016/17 amounting to 56,157 Swiss francs. The amount will be reimbursed by the Lisbon
Union to the Contribution-financed Unions as soon as the level of reserves of the Lisbon Union so allows.
Note 3: In accordance with the decision of the Assemblies of the Member States of WIPO at their 57th Seriesof Meetings in 2017: a) the Contribution-financed Unions have assumed the financing of the deficit of the Lisbon
Union in the biennium 2018/19 amounting to 1,662,315 Swiss francs; and b) the PCT Union has assumed thefinancing of the deficit of the Hague Union amounting to 18,135,044 Swiss francs. The amounts will bereimbursed by the Lisbon Union and the Hague Union, respectively, as soon as the level of reserves of theUnions so allow.
Note 4: In accordance with the decision of the Assemblies of the Member States of WIPO at their 59th Seriesof Meetings in 2019: a) as the Contribution-financed Unions do not have sufficient reserves above the target
to cover the deficit of the Lisbon Union amounting to 3,509,153 Swiss francs in 2020/21, the PCT Union has
assumed the financing of the deficit of the Lisbon Union in 2020/21; b) the PCT Union has assumed thefinancing of the deficit of the Hague Union amounting to 23,667,978 Swiss francs. The amounts will bereimbursed by the Lisbon Union and the Hague Union to the PCT Union, as soon as the level of reserves of
the Unions so allow..
Note 5: Actuarial gains/(losses) as at December 31, 2021 have been allocated based on the relative share ofheadcounts for 2021.

55

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

UNIO NSP rogra m P rogra m Title

Contribution
Fina nc e d

P CT

Ma drid

Ha gueS pe c ia l
Ac c ounts

LisbonTota l(in thousands of Swiss francs)
REV ENUE
Contributions
Fees

17,497

-

-

-

-

8,118

25,615-

361,775

82,429

6,185

71

-

450,460

1

381

30

-

-

-

- 460

- 384

73

- 447

- 495

Publications
Other/miscellaneous
Arbitration and Mediation
S ub- tota l re ve nue on budge ta ry ba sis
Miscellaneous revenue projects financed fromreserves
IPSAS adjustments to revenue
TO TAL REV ENUE

412
1

- 1,712

444

419

1,134

468

-

-

2,465

17 , 4 8 2

3 6 2 , 19 1

83,666

6,206

- 424

8 , 119477,240

-1

-1

-1

-1

-

-

-4

- 57

0

0

0

-

- 2,080- 2,137

17 , 4 2 4

3 6 2 , 19 0

83,665

6,205

- 424

6,039

475,099

EX P ENS ES
1Patent Law

97

1,478

72

-

-

-

1,647

2

Trademarks, Industrial Designs & Geographical
Indications

461

-

1,500

346

88

-

2,395

3

Copyright and Related Rights

7,553

1,071

127

-

-

-

8,751

4

Traditional Knowledge, Traditional Cultural Expressions& Genetic Resources

2,568

-

-

-

-

-

2,568

5

The PCT System-

102,260

-

172

-

-

102,432

6

Madrid System--

27,561163

11-

27,735

7

WIPO Arbitration and Mediation Center

1,105

1,044

2,825

1,167

-

-

6,141

8

Development Agenda Coordination

2

1,290

153

-

-

-

1,445

9

Africa, Arab, Asia and the Pacific, Latin America andthe Caribbean Countries, Least Developed Countries

12

9,678

1,590

233

106

-

11,61910Transition and Developed Countries

2

2,082

525

298

85

-

2,992

11

The WIPO Academy

8

6,395

760

1

-

-

7,164

12

International Classifications and Standards

367

2,854

816

41

-

-

4,078

13

Global Databases

1

3,057

1,308

348

-

-

4,714

14

Services for Access to Information and Knowledge

4

3,570

614

70

-

-

4,258

15

Business Solutions for IP Offices

6

5,239

623

-

-

-

5,868

16

Economics and Statistics

5

3,716

442

-

-

-

4,163

17

Building Respect for IP

2

1,666

198

-

-

-

1,866

18

IP and Global Challenges

4

3,402

405

-

-

-

3,811

19

Communications

9

7,145

850

169

-

-

8,173

20

External Relations, Partnerships and External Offices

6

4,944

861

310

65

-

6,186

21

Executive Management

531

8,346

2,517

575

34

-

12,00322

Program and Resource Management866

11,555

5,206

1,118

56

-

18,801

23

Human Resources Management and Development

637

8,124

2,804

647

66

-

12,27824

General Support Services

1,013

12,916

4,458

1,029

65

-

19,481

25

Information and Communication Technology

1,317

18,536

6,191

1,434

338

-

27,81626

Internal Oversight

151

1,931

666

154

10

-

2,912

27

Conference and Language Services

770

9,815

3,387

782

49

-

14,803

28

Information Assurance, Safety and Security

535

6,813

2,351

543

34

-

10,27630

SMEs and Entrepreneurship Support

4

2,982

354

-

-

-

3,340

31

The Hague System

-

-

-

7,741

-

-

7,741

32

Lisbon System

-

-

-

-

680

-

680

18 , 0 3 6

2 4 1, 9 0 9

6 9 , 16 4

17 , 3 4 1

1, 6 8 7-

3 4 8 , 13 7

83

9,278

1,701

1,011

-

-

12,073

18 , 119

2 5 1, 18 7

70,865

18 , 3 5 2

1, 6 8 7-

3 6 0 , 2 10

-

-

-

-

-

6,575

6,575

IPSAS adjustments to budgetary expenses and special
accounts

1,276

17,200

4,898

1,225

119

- 611

24,107IPSAS adjustments to projects financed from reserves

- 16

- 818

- 431

- 729

-

-

- 1,994

19 , 3 7 9267,569

75,332

18 , 8 4 8

1, 8 0 6

5,964

388,898785

19,777

2,151

-

-

-

22,713- 1, 17 0

114 , 3 9 8

10 , 4 8 4- 12 , 6 4 3- 2,23075

10 8 , 9 14

27,2615 6 3 , 9 1187,875- 54,593- 3,970-

620,484

S ub- tota l e xpe nse s on budge ta ry ba sis
Expenses on projects financed from reserves
S ub- tota l e xpe nse s on budge ta ry ba sis
inc luding re se rve e xpe nse sSpecial Accounts

TO TAL EX P ENS ES
Investment gains/(losses)
S URP LUS / (DEFICIT) FO R THE Y EAR
Ne t Asse ts a s a t De c e mbe r 3 1, 2 0 2 0 a c tua ria l ga ins/ (losse s) e xc lude dActuarial gains/(losses) as at December 31, 2020
Ne t Asse ts a s a t De c e mbe r 3 1, 2 0 2 02021 surplus/(deficit)- 11,471- 166,281- 44,634- 10,066- 969-- 233,421

15 , 7 9 0397,630

43,241- 64,659- 4,939-

387,063- 1,170

114,398

10,484- 12,643- 2,23075

108,914

Ne t Asse ts a s a t De c e mbe r 3 1, 2 0 2 1 a c tua ria l ga ins/ (losse s) e xc lude d26,091

678,309

98,359- 67,236- 6,200

75

729,398

Actuarial gains/(losses) as at December 31, 2021

- 14,826- 228,273- 62,684- 13,855- 1,263-- 320,901

Ne t Asse ts a s a t De c e mbe r 3 1, 2 0 2 1

11, 2 6 5450,036

35,675- 8 1, 0 9 1- 7,46375

408,497

56

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2021

ANNEX – EX GRATIA PAYMENTS (AUDITED INFORMATION)
Financial Regulation 5.10 states that a summary statement of ex gratia payments for the calendar year shall be
included in the annual financial statements of the Organization. There were no such payments made during 2021
and therefore no summary statement is required.

57

World Intellectual Property Organization34, chemin des Colombettes
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Tel: + 41 22 338 91 11
Fax: + 41 22 733 54 28
For contact details of WIPO’s
External Offices visit:www.wipo.int/about-wipo/en/offices© WIPO, 2022

Attribution 4.0 International (CC BY 4.0)
The CC license does not apply to non-WIPO
content in this publication.
Cover: Getty Images
WIPO Reference RN2022/17E
DOI: 10.34667/tind.46469