Annual financial reportand financial statements

Year to December 31, 2020

World Intellectual Property Organization
Annual Financial Report and Financial Statements
Year to December 31, 2020

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WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

CONTENTSANNUAL FINANCIAL REPORT ................................................................................ 4
INTRODUCTION .................................................................................................................................. 4
FINANCIAL STATEMENT DISCUSSION AND ANALYSIS .................................................................. 4
Operations and Environment ............................................................................................................................ 4
Financial Objectives and Strategies ................................................................................................................. 5
Risk Management............................................................................................................................................. 5
COVID-19 Pandemic ........................................................................................................................................ 5
Financial Performance 2020 ............................................................................................................................. 7
Financial Position 2020 .................................................................................................................................. 12
Cash Flow 2020 ............................................................................................................................................. 14

ANNUAL STATEMENT ON INTERNAL CONTROL................................................ 16
INDEPENDENT AUDITOR’S REPORT ................................................................... 20
FINANCIAL STATEMENTS ..................................................................................... 22
STATEMENT I: STATEMENT OF FINANCIAL POSITION............................................................................ 22
STATEMENT II: STATEMENT OF FINANCIAL PERFORMANCE .................................................................. 23
STATEMENT III: STATEMENT OF CHANGES IN NET ASSETS .................................................................. 24
STATEMENT IV: STATEMENT OF CASH FLOW ...................................................................................... 25
STATEMENT V: STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS - REVENUE.............. 26
STATEMENT V: STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS - EXPENSES ............ 27
NOTES TO THE FINANCIAL STATEMENTS .................................................................................... 28
Note 1: Objectives and Budget of the Organization ........................................................................................ 28
Note 2: Significant Accounting Policies .......................................................................................................... 28
Note 3: Cash and Cash Equivalents ............................................................................................................... 33
Note 4: Investments........................................................................................................................................ 33
Note 5: Receivables ....................................................................................................................................... 34
Note 6: Intangible Assets................................................................................................................................ 34
Note 7: Property, Plant and Equipment .......................................................................................................... 36
Note 8: Other Non-Current Assets ................................................................................................................. 37
Note 9: Payables and Accruals ...................................................................................................................... 38
Note 10: Employee Benefits ........................................................................................................................... 38
Note 11: Transfers Payable ............................................................................................................................ 42
Note 12: Advance Receipts ............................................................................................................................ 42
Note 13: Provisions ........................................................................................................................................ 43
Note 14: Contingent Assets and Liabilities ..................................................................................................... 43
Note 15: Leases ............................................................................................................................................. 43
Note 16: Related Party Transactions .............................................................................................................. 44
Note 17: Reconciliation of Statement V and Statement II ............................................................................... 45
Note 18: Expenses ......................................................................................................................................... 46
Note 19: Investment Gains/(Losses) .............................................................................................................. 47
Note 20: Financial Instruments ....................................................................................................................... 47
Note 21: Events After the Reporting Date ...................................................................................................... 50
Note 22: Segment Reporting .......................................................................................................................... 50

ANNEX – EX GRATIA PAYMENTS (AUDITED INFORMATION) ........................... 52

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WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

ANNUAL FINANCIAL REPORTINTRODUCTION
The financial statements of the World Intellectual Property Organization (WIPO) for the year ended December 31,
2020, 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 2020 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, 2020. This year, due to the unprecedented global impact of the
COVID-19 pandemic, a separate overview of its effects on the Organization’s operations and financial results has
also 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 partof 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 a specialized
agency of the United Nations, with 193 Member States. The Organization’s mission is to lead the development of abalanced and effective global intellectual property ecosystem to promote innovation and creativity for a better andmore 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. Mr Tang succeeds Mr Francis Gurry, who served as WIPO Director General from October 1, 2008. 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 directionof WIPO’s programs and in managing their respective Sectors to ensure the delivery of results in line with theOrganization’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 2020, fees from these activities represented 94.3 per cent of the Organization’s total
revenue, with PCT system fees alone representing 76.6 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 2020

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. Under this system, both the Program and Budget andthe Medium-Term Strategic Plan form part of WIPO’s planning framework, along with annual work plans andindividual 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.

COVID-19 Pandemic
The World Health Organization declared the outbreak of the COVID-19 coronavirus a public health emergency ofinternational concern (PHEIC) on January 30, 2020. It subsequently declared the outbreak a pandemic on March 11,
2020. The pandemic became a global challenge and impacted the global economy in an unprecedented manner.
In its 2019 financial statements, WIPO disclosed the outbreak as a non-adjusting event after the reporting date, in
accordance with IPSAS 14. This disclosure stated that, given the global effects of the pandemic, there would besignificant impacts on the Organization’s operations in 2020, the extent of which could not reliably be estimated atthat time. While the eventual impact on the way WIPO conducted its business in 2020 was profound, the direct,
visible and measurable impact on the financial performance for 2020 and the financial position at the end of theyear 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 are reflected in
the following summary of the effects of the pandemic on WIPO’s operations and financial results.
On March 17, 2020, WIPO premises at its headquarters in Geneva were closed in the face of the evolving healthcrisis and lockdown decisions made by the Host Government. Physical access to WIPO was limited to a small
critical presence needed to perform essential services on premises; all other staff continued to work remotely. The

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WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

Organization already had in place a Business Continuity Plan that addressed the threat of significant disruption tocritical functions, and was quickly able to adjust to these unprecedented circumstances. During the initial phase of
the crisis, staff were provided laptops and other equipment to permit them to connect to WIPO systems safely fromremote locations. WIPO services, including fee-based and support services, rapidly attained near-optimal capacity.
With the gradual decline of infection rates in the Geneva region, and the scaling back of lockdown measures by the
Host Government, WIPO initiated a carefully planned and phased return-to-premises program in June 2020.
However, in October 2020 the epidemiological situation in Geneva rapidly deteriorated as the second wave of the
COVID-19 pandemic gripped most of the world. This culminated in the Host Government issuing a new series ofrecommendations, including for employers to implement remote working as much as possible. As of November 2,
2020, all WIPO personnel, except those required to be on-site, resumed remote working.
The Organization monitored its directly related COVID-19 expenditure during 2020, which totaled approximately 3.6
million Swiss francs. This concerned principally expenditure on IT equipment and IT services to meet remote
working and virtual or hybrid meeting requirements. Other expenditure considered directly related to the impacts of
COVID-19 on the Organization’s operations included cleaning and disinfection products, furniture and equipmentfor new layout requirements, purchase of medical supplies, additional medical staff, and lunch allowances. Travelbans and restrictions during 2020 had a significant impact on WIPO’s activities involving traditional, in-person
implementation modalities, especially in the areas of capacity building and support services. This required theOrganization 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. Official meetings and conferences moved to hybrid and virtual modes during the year. 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.
WIPO’s revenue from fees charged for applications under the PCT, Madrid and Hague systems is recognized at
the date of publication of the application, in accordance with the requirements of IPSAS. As publication takes placesome time after the filing of an application, revenue levels from these systems do not necessarily provide an
immediate indication of the impact of the COVID-19 pandemic for the Organization. Looking more specifically at
filings of applications in 2020, overall demand for WIPO’s fee-based services under its intellectual property systems
remained strong considering the unprecedented circumstances. Revenue from the PCT system, based on
publications of PCT applications in the year, was 6.1 per cent higher than in 2019, totaling 358.6 million Swiss
francs. PCT application filings also grew in 2020, reaching an estimated 275,900 applications, a record figure anda 4.0 per cent increase on the 2019 number of 265,381. Revenue from the Madrid system, again recognized at thedate of publication of the application, fell by 0.8 per cent compared to 2019, totaling 76.2 million Swiss francs. Useof the Madrid system also slightly decreased in 2020. International trademark applications totaled an estimated
63,800, down by 0.6 per cent on the 2019 number of 64,168, representing the first decline since the global financial
crisis of 2008-2009. This was expected, given that trademarks tend to represent the introduction of new goods andservices, both of which slowed as a result of the global pandemic. The economic fallout from the pandemic also hit
demand for the protection of industrial designs via the Hague system. Applications fell by 1.7 per cent, and designs
in those applications dropped by 15.0 per cent. Revenue from the Hague system in 2020 actually increased from
5.3 million Swiss francs in 2019 to 6.7 million Swiss francs as registration publication volumes increased over theyear. The reduced demand for the Hague system seen in 2020 may be expected to impact revenue in 2021.
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 2020 than in 2019, no impairment was considered necessary for these long-term assets. For theOrganization’s liabilities, the most noticeable consequence of the pandemic was an increase of 5.8 million Swiss
francs in the accumulated annual leave liability, 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 for 2020,
the Organization increased the maximum annual accrual and carry-forward balance for annual leave.
At the end of 2020, the Organization achieved investment gains of 33.4 million Swiss francs. Global financial
markets reacted strongly to the onset of the COVID-19 pandemic in February and March 2020. Volatility increased
while asset prices witnessed one of the worst and most rapid drawdowns in history. 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. Most investment categories ended the year with positive returns and WIPO portfolio
returns significantly exceeded their long term targets. It is important to note that WIPO’s investment strategy for its
core cash and strategic cash portfolios is based on long-term fundamentals and is designed to resist periods offinancial turbulence.

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WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

Financial Performance 2020
The Organization’s results for 2020 showed a surplus for the year of 135.9 million Swiss francs, with total revenueof 468.3 million Swiss francs, total expenses of 365.8 million Swiss francs, and investment gains of 33.4 million
Swiss francs. This can be compared to a surplus of 97.7 million Swiss francs in 2019, with total revenue of 457.0
million Swiss francs, total expenses of 401.4 million Swiss francs, and investment gains of 42.1 million Swiss francs.
The Program and Budget result for 2020 prepared on a modified accrual basis (i.e. not including all IPSAS
adjustments) was a surplus of 168.5 million Swiss francs. The 2020 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

2020

2020

2020

2020

2020

2019

(in millions of Swiss francs)
Total revenue

463.0

9.5

-

-4.2

468.3

457.0

Total expenses-327.9

-5.9

-10.2

-21.8

-365.8-401.4

Investment gains/(losses)

33.4

-

-

-

33.4

42.1

Net surplus/(deficit)

168.5

3.6

-10.2

-26.0

135.9

97.7

The chart below summarizes the principal differences between the Program and Budget surplus of 168.5 million
Swiss francs, and the surplus for the whole Organization prepared on an IPSAS basis of 135.9 million Swiss francs:
Movement from budget result to IPSAS result 2020
168.5

+3.6
-10.2

-9.8
+2.5

millions of Swiss francs-14.6

BUDGETRESULT

Modifiedaccrual basis

Projects
financed fromreserves

Special
Accounts

Depreciation
andamortization

Changes in
employeebenefitliabilities

Entity differences

Special
Accounts
revenuerecognition

135.9
-0.5

-3.6

Capitalization/
disposal of
fixed assets

Accounting basis differences

Other
adjustments

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
10.2 million Swiss francs) and Special Accounts (surplus of 3.6 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 26.0 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 of buildings and the acquisition of equipment, along withlosses from the disposal or demolition of fixed assets.

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WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

Revenue
Composition of 2020 revenue on an IPSAS basis(in millions of Swiss francs)

Madrid system fees
76.2
(16.3%)

Assessedcontributions
17.6
Voluntary(3.8%) contributions
5.8(1.2%)
Hague system fees
6.7
(1.4%)

PCT system fees
358.6
(76.6%)

Other revenue
3.4(0.7%)

Total revenue of the Organization for 2020 was 468.3 million Swiss francs, representing an increase of 2.5 per centcompared to the 2019 total revenue of 457.0 million Swiss francs. The largest source of revenue during 2020 was
PCT system fees, accounting for 76.6 per cent of total revenue. Revenue from PCT system fees rose by 6.1 percent compared to 2019.
Madrid system fees were the second largest source of revenue during the year 2020, representing 16.3 per cent of
total revenue. Revenue from Madrid system fees fell by 0.8 per cent compared to 2019. Hague system fees, Lisbon
system fees, assessed contributions, voluntary contributions (contributions by donors to Special Accounts) andother revenue (publications, arbitration and mediation and other/miscellaneous revenue) comprise the remaining
7.1 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 2019-2020
2020

2019

Net Change

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

#

17.6

17.3

0.3

1.7

Voluntary contributions

#

5.8

10.9

-5.1

-46.8

Publications revenue

#

0.5

0.3

0.2

66.7

Fees

-

PCT system

#

358.6

338.1

20.5

6.1

Madrid system

#

76.2

76.8

-0.6

-0.8

Hague system

#

6.7

5.3

1.4

26.4

#

441.5

420.2

21.3

5.1

2.1

2.0

0.1

5.0

Sub-total fees

Arbitration and Mediation#-

Other/miscellaneous revenue

#

0.8

6.3

-5.5

-87.3

Total revenue

#

468.3

457.0

11.3

2.5

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WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

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 – 2016-2020
2020

2019

2018

2017

2016

(in millions of Swiss francs)
International filing fees

366.9

335.6

315.4

293.6

281.8

Other fees

3.2

3.4

3.6

3.6

3.8

Exchange gain/(loss) on fees received

-8.6

-2.6

1.7

0.4

5.2

Other exchange gain/(loss)

-2.9

1.7

0.7

-1.2

-0.1

Total PCT system fees

358.6

338.1

321.4

296.4

290.7

Revenue from PCT system fees on an IPSAS basis increased by 6.1 per cent compared to 2019. In the financial
statements prepared under IPSAS, revenue for international filing fees from PCT applications is recognized only on
publication of the application. In 2020 there were 264,584 publications compared to 246,636 in 2019. 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 the year:
PCT - International filing fees and publications 2016-2020
300,000

400.0

Number of publications

300.0
200,000

250.0

150,000

200.0
150.0

100,000

100.0
50,00050.0

0Revenue (millions of Swiss francs)

350.0

250,000

0.0
2016

2017

2018

Number of publications

2019

2020

International fees for published applications

Madrid system fees principally comprise basic fees received from applications for registrations or renewals and fees
for subsequent designations:
Detail of Madrid system fees – 2016-2020
2020

2019

2018

2017

2016

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

64.7

64.2

62.4

58.5

49.7

Subsequent designations

6.0

6.4

5.8

5.5

4.8

Other fees

5.5

6.2

6.1

5.9

5.1

Total Madrid system fees

76.2

76.8

74.3

69.9

59.6

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 2019and 2020, the number of registrations fell from 64,118 to 62,062. However, in the same period the number ofrenewals rose from 29,136 to 32,731:

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WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

100,000

70.0
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 2016-2020

0.0
2016

2017

2018

Registrations and renewals

2019

2020

Fees for published registrations and renewals

Revenue from Hague system fees totaled 6.7 million Swiss francs for 2020, representing an increase of 26.4 percent compared to the 2019 figure of 5.3 million Swiss francs. Registrations under the Hague system rose from 5,042
in 2019 to 6,795 in 2020. Lisbon system fees totaled 7,000 Swiss francs in 2020, compared to 14,000 Swiss francs
in 2019.
Revenue from assessed contributions of 17.6 million Swiss francs in 2020 represents 3.8 per cent of total revenue,
while revenue from voluntary contributions of 5.8 million Swiss francs in 2020 represents 1.2 per cent of total
revenue. Revenue from voluntary contributions fell by 46.8 per cent compared to the prior year. Voluntary
contributions in 2020 were received under Special Accounts, for which revenue 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 the recognition of revenue in 2020. The
actual receipt of voluntary contributions in 2020 was more in line with the prior year, totaling 9.4 million Swiss francs
compared to 10.1 million Swiss francs in 2019.
Arbitration and mediation revenue of 2.1 million Swiss francs was up by 0.1 million Swiss francs on the prior year,
while publications revenue of 0.5 million Swiss francs was 0.2 million Swiss francs higher than in 2019.
Other/miscellaneous revenue totaled 0.8 million Swiss francs in 2020, compared to 6.3 million Swiss francs in 2019.
The higher amount in 2019 was mainly the result of the reversal of unused provisions for legal costs.

ExpensesComposition of 2020 expenses on an IPSAS basis(in millions of Swiss francs)

Contractual services
88.6(24.2%)

Operating expenses
20.9(5.7%)

Depreciation andamortization
9.8(2.7%)

Personnel expenditure
233.7(63.9%)

Interns and WIPO
fellowships
5.5(1.5%)
Other expenses
2.0(0.6%)

10

Equipment andsupplies
5.3(1.4%)

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

Detailed breakdown of 2020 expenses(in millions of Swiss francs)
Personnel
expenditure
233.7

Posts

Contractual
services
88.6

Operatingexpenses
20.9

223.5

Temporary staff

8.5

Other staff costs

1.7

Conferences

1.3

Individual contractual services

12.3

Other contractual services

75.0

Premises and maintenance

18.5

Communication

1.3

Representation & other operating expenses

0.6

United Nations joint services

0.5

Buildings depreciation
Depreciation
and amortization Equipment depreciation
9.8
Intangible assets amortization

8.6

Interns and WIPO Internships
fellowships
WIPO fellowships
5.5

0.5

0.5
0.7

5.0

Equipment andsupplies
5.3

Supplies and materials

4.8

Furniture and equipment

0.5

Other expenses
2.0

Travel, training and grants

1.8

Finance costs

0.2

Total expenses of the Organization for 2020 were 365.8 million Swiss francs, representing a decrease of 8.9 percent compared to 2019 total expenses of 401.4 million Swiss francs. The largest expense for the Organization was
personnel expenditure of 233.7 million Swiss francs, representing 63.9 per cent of total expenses. Contractual
services of 88.6 million Swiss francs were the second largest expense for the Organization, followed by operating
expenses of 20.9 million Swiss francs. The following table provides a summary of the changes by expense typecompared to the prior year:
Expenses variance 2019-2020
2020

2019

Net Change(in millions of Swiss francs)

Net Change%

Expenses
Personnel expenditure

#

233.7

242.5

-8.8

Internships and WIPO fellowships

#

5.5

5.2

0.3

5.8

Travel, training and grants

#

1.8

17.5

-15.7

-89.7

Contractual services

#

88.6

96.1

-7.5

-7.8

Operating expenses

#

20.9

22.5

-1.6

-7.1

Equipment and supplies

#

5.3

6.4

-1.1

-17.2

Depreciation and amortization

#

9.8

10.2

-0.4

-3.9

Finance costs

#

0.2

1.0

-0.8

-80.0

Total expenses

#

365.8

401.4

-35.6

-8.9

-3.6

The Organization’s expenses decreased in nearly all areas compared to 2019. The most significant reduction wasfor travel, training and grants, which fell from 17.5 million Swiss francs in 2019 to 1.8 million Swiss francs in 2020.
This 89.7 per cent decrease was a direct consequence of the effects of the COVID-19 pandemic on the
Organization’s activities, with restrictions over movement and mass gatherings significantly impacting travel for
missions and physical participation in conferences and meetings.
The Organization’s personnel expenditure comprises principally net base salary and post adjustments for staff inposts or temporary positions. Combined these represent 144.8 million Swiss francs, 62.0 per cent of total personnel
expenditure for 2020. Total personnel expenditure in 2020 of 233.7 million Swiss francs has decreased by 8.8 percent compared to total personnel expenditure of 242.5 million Swiss francs in 2019. Several factors have contributed
to this decrease. The total of net base salary and post adjustments of 144.8 million Swiss francs was 3.1 million
Swiss francs lower than the 2019 figure. The impact of movements in long-term employee benefit liabilities
recognized through personnel expenditure was also 2.5 million Swiss francs lower in 2020 than in 2019. In addition,
the cost of staff termination agreements fell by 2.7 million Swiss francs compared to the prior year. The cost ofinternships and WIPO fellowships, which is not included as part of personnel expenditure, increased slightly
compared to 2019, rising by 5.8 per cent to 5.5 million Swiss francs.
Contractual services in 2020 totaled 88.6 million Swiss francs. These expenses have decreased by 7.5 million Swiss
francs compared to the 2019 figure. Within this, conference expenses, including interpreter remuneration, premises
rental and material costs, were 3.1 million Swiss francs lower than the prior year. Individual contractual services
were 2.2 million Swiss francs down on the 2019 figure, and training expenses fell by 0.5 million Swiss francs.
Operating expenses in 2020 totaled 20.9 million Swiss francs, a decrease of 7.1 per cent compared to the 201911

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

total of 22.5 million Swiss francs. Notably communication expenses, including postage costs, fell by 0.8 million
Swiss francs against the 2019 figure. Expenses for equipment and supplies fell from 6.4 million Swiss francs in2019 to 5.3 million Swiss francs in 2020, and depreciation and amortization of capitalized fixed assets were also
lower than in the prior year, totaling 9.8 million Swiss francs, compared to a charge of 10.2 million Swiss francs in2019.

Financial Position 2020
As at December 31, 2020, the Organization had net assets of 387.1 million Swiss francs, with total assets of 1,390.9
million Swiss francs and total liabilities of 1,003.8 million Swiss francs. During 2020, the Organization’s net assets
increased by 22.9 million Swiss francs. The surplus for the year of 135.9 million Swiss francs was largely offset byactuarial losses related to WIPO’s liability for ASHI, which totaled 114.9 million Swiss francs and were recognizedthrough net assets. A revaluation gain of 1.9 million Swiss francs on land owned by the Organization was also
recognized through net assets:
Movement in net assets 2018-2020

millions of Swiss francs+135.9

+5.1

+97.7

-113.0

387.1

364.2

261.4

Net assets
December 31,
2018

Surplus on an
IPSAS basis
2019

Actuarial gains
Net assets
and adjustment to December 31,
Revaluation
2019
Reserve Surplus

Surplus on an
IPSAS basis
2020

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

The following chart provides a summary of the Statement of Financial Position of WIPO as at December 31, 2020.
Total assets of 1,390.9 million Swiss francs are composed primarily of cash, cash equivalents, investments andfixed assets. Total liabilities of 1,003.8 million Swiss francs are principally employee benefits, and payables andadvance receipts:
Summary of assets and liabilities December 31, 2020
1,390.9

millions of Swiss francs

Net assets
387.1

1,003.8

Cash & cash
equivalents
and investments
932.0
Employee benefits
495.3

Fixed assets
382.5

Payables andadvance receipts
435.3

Other 76.4

Other 73.2

AssetsLiabilities

12

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

AssetsAt the end of 2020 the Organization held cash, cash equivalents and investment balances of 932.0 million Swiss
francs, representing 67.0 per cent of total assets. This included amounts totaling 186.0 million Swiss francs
classified as restricted, and amounts totaling 211.2 million Swiss francs representing strategic cash andinvestments. The total balance of 932.0 million Swiss francs was 177.9 million Swiss francs higher than the balanceof 754.1 million Swiss francs at the end of 2019.
The Organization holds significant fixed assets (land, buildings, intangible assets and equipment) with a total net
book value of 382.5 million Swiss francs. During 2020, costs totaling 1.8 million Swiss francs for additions andimprovements to existing buildings were capitalized, and equipment acquisitions of 0.9 million Swiss francs were
capitalized. The total depreciation and amortization charge against all fixed assets was 9.8 million Swiss francs for
2020.
Other assets of the Organization totaling 76.4 million Swiss francs included accounts receivable and advancepayments. Within this, the most significant balance was PCT debtors totaling 53.1 million Swiss francs. At any given
time, 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 balance of PCT debtors
decreased compared to the prior year, when it totaled 59.1 million Swiss francs. Although PCT applications
increased in 2020, the percentage of unpaid applications at year end fell compared to the prior year, from 16.5 percent to 13.9 per cent of filings in the year.

Liabilities
Employee benefit liabilities of 495.3 million Swiss francs were mainly comprised of the ASHI liability of 452.8 million
Swiss francs, representing 91.4 per cent of the total employee benefits liability as at December 31, 2020. The ASHI
liability increased by 139.1 million Swiss francs compared to the 2019 balance. 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 theirdependents, 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 that allows 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 totheir incurred medical cost.
The ASHI liability calculation incorporates a number of actuarial assumptions. These include the discount rate,
medical cost trend rates, age-grading for medical claims, 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 2020 was mainly due to amodification of the expected future age-related medical costs. The ASHI liability is the ultimate cost of providing
future post-employment medical costs, derived from the medical insurance premiums by applying an age-specificgrading factor based on an analysis of recent claims data which has led to changes and increases at certain age
groups. This 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 a further lowering of the discount rate from 0.50 per cent to 0.30
per cent, which also led to an increase in the liability. This was partly offset by a decrease in the medical cost trend
rate from 3.00 per cent to 2.90 per cent. The following graph shows how the ASHI liability has developed since2016, and includes actuarial forecasts for 2021-2024 (applying the same assumptions as for the 2020 calculation).
The graph also shows how discount rates and medical cost trend rates have changed since 2016:

13

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

600.0

6.00

500.0

5.00

400.0

4.00

300.0

3.00

200.0

per cent

millions of Swiss francs

Movement in ASHI liability 2016-2024

2.00
2021 -2024 actuarial forecast

100.0

1.00

0.0

0.00

2016

2017
Benefit obligation

2018

2019

2020
Discount rate

2021

2022

2023

2024

Medical cost trend rate

The projections of the ASHI liability for 2021-2024 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 2021-2024 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, 2020, payables and advance receipts totaled 435.3 million Swiss francs, and mainly included
deferred revenue for the processing of international applications (under the PCT, Madrid and Hague systems) for
289.1 million Swiss francs. This deferred revenue balance principally concerns PCT system fees of 286.1 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, a number of PCT applications will have been filed with either receiving
Offices or WIPO which have yet to be published. As at December 31, 2020, for applications with a 2019 or 2020
filing date, it is estimated that approximately 206,528 applications were unpublished. At the end of the prior year
2019, approximately 202,932 applications filed in 2018 or 2019 were unpublished and the deferred revenue balance
for PCT system fees was 281.8 million Swiss francs.

Cash Flow 2020
The Organization’s cash, cash equivalents and investments balance has continually increased over the last ten
years. A further significant increase of 177.9 million Swiss francs was achieved in 2020. This included fair value
increases of 21.5 million Swiss francs on the Organization’s medium-term investment portfolio, and 11.7 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 30.7 million Swiss francs
during the year 2020 compared to 29.3 million Swiss francs during the year 2019. The Organization generally holds
its cash deposits in instant access bank accounts. During 2020 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 instant access bank accounts following the introduction of negative interest rates during 2015.
As at December 31, 2020, WIPO’s medium-term investment portfolio (core cash investments) had a fair value of
471.7 million Swiss francs, and the long-term investment portfolio (strategic cash investments) had a fair value of200.6 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 2020, as noted above, reflect short termmarket 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 dividendsof 4.9 million Swiss francs during 2020.
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

14

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

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
211.2 million Swiss francs as at December 31, 2020. This comprised the long-term investment portfolio (including
unrealized gains) of 200.6 million Swiss francs, and cash balances yet to be invested of 10.6 million Swiss francs.
These balances included the additional amounts generated in 2020 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 2016-2020
1,000.0

Total
932.0

900.0
Total
754.1

millions of Swiss francs

800.0
700.0

Total
616.0

600.0
500.0
400.0

Total
474.5

Total
489.5

88.9

102.1

Total
542.3

Total
544.7

108.6

124.4

190.2
186.0

125.8
179.7
182.8

161.8

300.0

211.2

164.6

174.9

161.9

534.8
200.0
100.0

384.2
221.0

225.5

307.4

271.9

245.4

0.0

2014

2015

2016

Unrestricted cash/investments

2017
Restricted cash

15

2018

2019

Strategic cash/investments

2020

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

ANNUAL STATEMENT ON INTERNAL CONTROL
December 31, 2020
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 also on assurance, as detailed below, provided by the former Director General forthe period January 1 to September 30, 2020, Deputy Directors General and Assistant Directors General in office in
2020, the Organization’s assurance functions and information 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 aims, objectives and related policies. The aim of this system of internal control is to manage risk to a tolerable
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 framework and Three Lines Model.
My current statement on WIPO’s internal control processes, as described above, applies for the year ended
December 31, 2020, and up to the date of the approval of the Organization’s 2020 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 sets the implementation parameters for the biennium, and control processes centered on the WIPO FRRs
ensure that WIPO Programs are 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
The year represented a period of significant uncertainty and disruption globally. In order to provide assurance
publicly, WIPO published monthly crisis management dashboards on its website. Despite the disruptions, income
was higher than forecasted, and this demonstrates to some extent, the resilience of the global IP ecosystem. At
the organizational level, I chaired the Crisis Management Team and the Risk Management Group. These structures
work together to manage the Organization’s overall risk portfolio as outlined in the WIPO Risk Appetite Statement,in the context of the global health and economic crisis. Critical risks and appropriate responses were reviewed
regularly. These include the following key risks that we faced in 2020 and beyond:Program Delivery Risk

The Covid-19 pandemic and the restrictions related to on-site presence, travel and meetings placed severe pressure
on some Programs to deliver planned activities.

16

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

Control and mitigation: Our Global IP Systems continued to operate almost seamlessly with productivity indicators
for PCT, Madrid and the Hague all at 98% or above by December 2020. However, those of WIPO’s Programs thatare largely dependent on traditional, in-person implementation modalities for the holding of meetings and 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.
Financial Risk

Particularly in light of the Covid-19 situation, the risk that revenue would be lower than initially forecast, or that thevalue of some investments made under the investment strategies for operating, core and strategic cash pools could
decrease, was exacerbated.
Control and mitigation: Filing numbers continued to remain resilient throughout 2020 with the Organizational income
correspondingly strong. There was a significant planned ‘buffer’ between forecast revenue and planned
expenditure. Investments continued to be under close review and oversight by the Advisory Committee on
Investments with the assistance of independent investment advisors throughout the year and through monthly
reporting to the IAOC.


Cyber Risk

WIPO is exposed to the risk of cyber-attacks, potentially more so during remote working modalities, and the risk ofmalicious 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: WIPO continues 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.
Strategic Risk

Risk that WIPO’s Global IP services fail to keep pace and remain the best value option for IP protection, or theperceived value of IP protection declines, in the context of a rapidly changed global economic, political andtechnological landscape, including from the Covid-19 pandemic.
Control and mitigation: WIPO will engage and communicate more effectively around the world on IP and connect it
more clearly to the improvement of lives and livelihoods, and more broadly, to its power as a tool to catalyze
economic and societal benefits. To ensure that our services continue to bring value to users, we will continue toscan, understand and use emerging technologies such as artificial intelligence, block chain, digital time stamping
and digital media in improving our services.

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 is supported and informed by:

A statement on internal control from the former Director General, referring to the period January 1 to September
30, 2020 which has been reviewed by me and the Risk Management Group and is supported by Management
Representation Letters (MRL);The Deputy Directors General and Assistant Directors General in office in 2020, who have signed MRLs fromwhich 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 atpreventing and/or detecting instances of fraud and major errors;

The Risk Management Group (RMG) whose purpose is to promote a culture of responsible risk management
in WIPO and 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;

The Chief Ethics Officer, who is accountable for ensuring the design, development and implementation of aneffective Ethics program to enhance integrity, compliance with ethics rules, and the ethical conduct of theOrganization’s business. WIPO’s Code of Ethics, and policies on Financial Disclosure and Declaration ofInterests, Protect Against Retaliation for Reporting Misconduct and for Cooperating with Duly Authorized Audits
or Investigations further contribute to setting the right tone in this area;



The Internal Oversight Division (IOD), on whose assurance and advisory services I rely, through reports ofinternal audit and evaluation as well as management implication reports resulting from investigations. These
reports include recommendations, independent and objective observations on the efficiency and effectiveness17

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020of the Organization’s system of internal controls and risk management processes, as well as program
performance, and other related activities of oversight;


The Independent Advisory Oversight Committee (IAOC), which is an external expert advisory body that assists
member states with oversight of WIPO’s operations. Its mandate includes the promotion of internal controls,
reviewing the effectiveness and operational independence of the internal oversight function, and reviewing andadvising on the ethics function;



The Joint Inspection Unit of the United Nations System, which is mandated to conduct evaluations, inspections
and investigations system-wide;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; and

The Governing Bodies’ observations.

I further ensure that Feedback Mechanisms are in place for Member States, Customer Complaint Resolution
Services are in place for clients and that Informal and Formal Conflict Resolution Mechanisms are in place for staff.

4. Control Activities
Over 380 Process Level Controls are management controls that ensure the effective and efficient functioning of
end-to-end business processes and the compliance with the Organization’s regulatory framework. These controls
are assessed annually for strength, in particular their maturity, automation and level of documented evidence. The
results are reported to the RMG and the IAOC in the WIPO Assurance Summary.
During 2020, the Organization largely moved to a virtual working environment as a result of the Covid pandemic.
Control activities continued to be undertaken in the virtual environment as previously, ensuring the robust control
environment was maintained. However, over the course of the year, some controls were digitalized or otherwise
modified, for example, electronic signatures in place of hand written authorization. We continued to make
improvements the system of assurance including the development of a strategy that defines the increased use ofdata analytics for internal controls as well as an increased identification of internal controls in the areas ofInformation Security, Information Technology, Enterprise Solutions, and Staff Development. Looking forward, we
anticipate initiating implementation of the above strategy and a focus on control assessments for External Offices.

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 take stock of the evolving situation periodically. External specialistrisk intelligence provides independent advice to ensure a comprehensive view, and internally, an annual survey tosenior 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
The conduct and actions of WIPO staff must always adhere to the highest ethical standards, as set out in the WIPO
Code of Ethics. Ethics training is provided to all staff through the Ethics Office and fraud awareness training has
been completed by over 96 per cent of staff.
WIPO has in place Organization-wide anti-fraud controls, in accordance with good practices and applicableinternational standards, based on risk assessments. Appropriate fraud prevention, detection, response and datacollection procedures and processes exist in the Organization, reflecting WIPO’s comprehensive anti-fraud
governance framework.

18

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

WIPO’s Policy on Financial Disclosure and Declaration of Interests aims to: (i) promote transparency andaccountability; (ii) enhance internal and external public trust in the integrity of the Organization; and (iii) assist theOrganization to manage the risk of actual and perceived conflicts of interest through disclosure, mitigation andprevention.

7. Control Environment
Forty 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, it is revisedwith the endorsement of Member States. 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 Codeof 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
June 18, 2021

19

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

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 2020, which comprise the statement of financial position, the statement of financial performance,statement of changes in net assets, statement of cash flow, the statements of comparison of budget and actual
amounts for the year then ended, 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 2020 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 and the financial transactions conform to the Organization’s Financial Regulations.

Basis for opinion(s)I conducted my audit in accordance with International Standards on Auditing (ISAs) and the Organization’s Financial
Regulations. My responsibilities under these are further described in the Auditor’s Responsibilities for the Audit of
the Financial Statements section of my report.
The ISAs require me and my staff to comply with the Financial Reporting Council’s Revised Ethical Standard 2016.
I am independent of the World Intellectual Property Organization in accordance with the ethical requirements thatare relevant to my audit of the financial statements. My staff and I have fulfilled our other ethical responsibilities inaccordance 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. My opinion on the financial statements does notcover the other information and I do not express any form of assurance conclusion thereon. In connection with myaudit 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 amaterial misstatement of this other information, I am required to report that fact. I have nothing to report in thisregard.

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.

20

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

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 an auditor’s report 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 andappropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting fromfraud 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 to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the WorldIntellectual Property Organization’s internal control;
evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates andrelated disclosures made by management;
conclude on the appropriateness of management’s use of the going concern basis of accounting and, basedon 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 we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to therelated disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the World Intellectual Property Organization to cease to continue as a going
concern; andevaluate the overall presentation, structure and content of the financial statements, including the disclosures,and whether the financial statements represent the underlying transactions and events in a manner 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 Office,157-197 Buckingham Palace Road,
Victoria,
London. SW1W 9SP
United Kingdom 21 June 2021

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WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

FINANCIAL STATEMENTS
STATEMENT I: Statement of Financial Position
as at December 31, 2020
(in thousands of Swiss francs)

Note

December 31, 2020

December 31, 2019ASSETS
Current assets
Cash and cash equivalents

3

143,540

206,031

Investments

4

116,116

18,304Contributions receivable

5

1,547

2,369

Exchange transactions receivable

5

66,79273,258327,995

299,962
529,725

Non-current assets
Investments

4672,344

Intangible assets

6

24,02824,461

Property, plant, and equipment

7358,491

363,539

Other non-current assets

8

TOTAL ASSETS

7,995

8,185

1,062,858

925,910

1,390,853

1,225,872

LIABILITIESCurrent liabilities
Payables and accruals

915,531

24,036

Employee benefits

10

14,405

11,282

Transfers payable

11

98,22894,492

Advance receipts

12317,841

313,787

Finance lease

15

104

-

Provisions

13

986

1,811

Current accounts

71,707

67,623518,802513,031344,942

Non-current liabilities
Employee benefits

10

480,936

Finance lease

15

415

-

Advance receipts

12

3,637

3,672

484,988348,614TOTAL LIABILITIES

1,003,790

861,645

Accumulated Surpluses

565,601

418,413

Special Projects Reserve

28,17339,490

Revaluation Reserve Surplus

20,36818,532-233,421-118,550

6,342

6,342

387,063364,227

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

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

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WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

STATEMENT II: Statement of Financial Performancefor the year ended December 31, 2020
(in thousands of Swiss francs)
2020

2019

Assessed contributions

17,551

17,313

Voluntary contributions

5,769

10,863Publications revenue

498

353

PCT system

358,557

338,108

Madrid system

76,20976,840

Hague system

6,667

5,288

Lisbon system

714441,440

420,250

2,091

1,963

923

6,291

468,272

457,033

233,735

242,511

Note
REVENUEFees

Sub-total fees
Arbitration and Mediation
Other/miscellaneous revenue
TOTAL REVENUE
EXPENSES

18

Personnel expenditure
Internships and WIPO fellowships

5,478

5,183

Travel, training and grants

1,772

17,509Contractual services

88,61996,123Operating expenses

20,87322,518Equipment and supplies

5,340

6,392

Depreciation and amortization

9,773

10,205240

1,020

365,830

401,461

33,42942,102

135,871

97,674

Finance costs
TOTAL EXPENSES
Investment gains/(losses)

19

SURPLUS/(DEFICIT) FOR THE PERIOD

23

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

STATEMENT III: Statement of Changes in Net Assets
for the year ended December 31, 2020
(in thousands of Swiss francs)

Accumulated
Surpluses

SpecialProjects
Reserve

Actuarial
Revaluation gains/(losses)
Working
Reservethrough Net
Capital Funds
Surplus
AssetsNet Assets at December 31, 2018328,732

31,497

17,266

Surplus/(deficit) for the year 2019

103,001-5,327-

Transfer to/from Special Projects
Reserve-18,973

18,973

5,653

Adjustment to Revaluation
Reserve Surplus

Actuarial gains/(losses)-122,425

Net Assets
Total

6,342

261,412--

97,674-----5,653

-

-

-

-

-

-

1,266

-

-

1,266

-

-

-

3,875

-

3,875

Net Assets at December 31, 2019

418,41339,49018,532

6,342

364,227

Surplus/(deficit) for the year 2020

144,421-8,550---135,871

Transfer to/from Special Projects
Reserve

1,057-1,057----

Adjustment to Accumulated Surpluses

1,710-1,710----Adjustment to Revaluation
Reserve Surplus

-

-

1,836

-

-

1,836

Actuarial gains/(losses)

-

-

-

-114,871--114,871

565,601

28,173

20,368-233,421

6,342

387,063

Adjustment to Accumulated Surpluses

Net Assets at December 31, 2020

24

-118,550

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

STATEMENT IV: Statement of Cash Flowfor the year ended December 31, 2020
(in thousands of Swiss francs)

Note

2020

2019

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

Statement II

135,871

97,674

Depreciation and amortization

6&7

9,773

10,205(Increase) decrease in inventories

-

1,298

(Increase) decrease in receivables

5

7,288

-3,771(Increase) decrease in other assets

8

190

182

Increase (decrease) in advance receipts

12

4,019

17,417

Increase (decrease) in payables and accruals

9-8,505

7,500

Increase (decrease) in transfers payable

11

3,736

-2,154

Increase (decrease) in provisions

13

-825

-3,777

Increase (decrease) in current accounts

4,084-2,955

Movement in employee benefits (1)Interest, dividends, investment and exchange
gains/losses (2)24,24625,975-37,170-47,543

142,707

100,051

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

7-2,722-9,297

Disposals of property, plant, and equipment

7

536

-

(Increase) decrease in intangible assets

6

-270

-261

(Increase) decrease in investments

4-240,431-154,925

Increase (decrease) in fair value of investments

4

33,28042,191Dividends and interest on investments

19

4,948

5,222

-204,659-117,070

519

-

519

-

Effect of exchange rate changes on cash andcash equivalents-1,058130

Net increase (decrease) in cash and cash
equivalents-62,491-16,889

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

206,031

222,920

Cash and cash equivalents at end of year3

143,540

206,031(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.

25

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

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

Updated Budget
2020

(1)

(2)

17,377

17,377

17,492115

PCT system

327,230

349,200

358,557

9,357

Madrid system

79,375
6,067

72,6105,270

76,209
6,667

3,599

Hague system
Lisbon system

25

25

7

-18

412,697

427,105

441,440

14,335

1,650

1,650

2,091

441

384

384

498

114

Other/miscellaneous

1,822

1,822

1,416

-406

TOTAL REVENUE

433,930

448,338

462,937

14,599Assessed contributions

Actual Revenue on
comparable basis 2020

Difference
2020
(3)

Fees

Sub-total fees
Arbitration and Mediation
Publications

1,397(1) Original Budget represents the first year of the approved Program and Budget for the 2020/21 biennium.
(2) Updated Budget includes updated revenue estimates for the PCT, Madrid and Hague systems as per the October 2020
Forecast from the Department for Economics and Data Analytics.
(3) Represents the difference between the Updated Budget 2020 and actual revenue on a comparable basis for the year ended
December 31, 2020.

26

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

STATEMENT V: Statement of Comparison of Budget and Actual
Amounts - Expenses
for the year ended December 31, 2020
(in thousands of Swiss francs)
Original Budget after
BudgetTransfers
2020
2020
(1)

(2)

Actual Expense
on acomparable
basis
2020

1

Program Title
Patent Law

3,046

2,895

1,927

2

Trademarks, Industrial Designs & Geographical Indications

2,676

2,715

1,967

748

3

Copyright and Related Rights

8,579

9,261

7,959

1,302

4

Traditional Knowledge, Traditional Cultural Expressions &Genetic Resources

3,616

3,412

2,558

854

5

The PCT System

110,231

109,097

98,755

10,342

6

Madrid System

31,03028,031

26,781

1,250

7

WIPO Arbitration and Mediation Center

6,390

6,467

5,476

991

8

Development Agenda Coordination

1,874

1,678

1,279

399

9

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

14,59013,378

11,5991,779

10Transition and Developed Countries

4,446

4,290

3,651

639

11

The WIPO Academy

6,652

6,154

5,981

173

12

International Classifications and Standards

3,637

3,703

3,088

615

13

Global Databases

5,428

5,573

5,110

463

14

Services for Access to Information and Knowledge

3,894

3,531

3,510

21

15

Business Solutions for IP Offices

7,245

5,898

5,272

626

16

Economics and Statistics

3,760

3,884

3,682

202

17

Building Respect for IP

2,371

2,346

1,857

489

18

IP and Global Challenges

2,483

2,515

2,425

90

19

Communications

8,336

8,316

7,184

1,132

20

External Relations, Partnerships and External Offices

7,560

7,246

5,838

1,408

21

Executive Management

13,29012,803

11,695

1,108

22

Program and Resource Management

20,14419,02916,306

2,723

23

Human Resources Management and Development

13,33913,553

12,311

1,242

24

General Support Services

20,007

17,697

16,5291,168

25

Information and Communication Technology

25,16027,696

26,826870

26Internal Oversight

2,548

2,547

2,356

191

27

Conference and Language Services

18,586

16,657

14,668

1,989

28

Information Assurance, Safety and Security

12,35912,16911,022

1,147

30

SMEs and Entrepreneurship Support

3,248

2,771

2,400

371

31

The Hague System

6,540

7,699

7,219

480

32

Lisbon System

703

698

650

48

UN

Unallocated

7,354

6,068

-

6,068

TOTAL EXPENSES

381,122369,777

327,881

41,896INVESTMENT GAINS/(LOSSES) (4)NET SURPLUS/(DEFICIT)

-844

-844

33,42934,27351,96477,717

168,485

90,768Program

IPSAS adjustments to surplus (5)Difference
2020

968

(3)

-26,015

Special Accounts and Projects financed from reserves-6,599ADJUSTED NET SURPLUS PER IPSAS

135,871(1) Original Budget represents the budget of the first 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) Budget after Transfers includes budgetary transfers as at December 31, 2020.
(3) Represents the difference between the Budget after Transfers 2020 and Actual Expense on a comparable basis for the year ended December
31, 2020.
(4) Investment losses in the Program and Budget for the 2020/21 biennium were related to short-term cash balances (operating cash) only.
(5) The IPSAS adjustments to the surplus are detailed in Note 17 of these financial statements.

27

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

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 promotes innovation and creativity for the economic, social and cultural development of all countries, througha balanced and effective international intellectual property system. WIPO’s broad-ranging activities include thefollowing main areas of work: providing intellectual property services through the Organization’s Global IP
systems; developing and maintaining the technical infrastructure that not only supports the international IP system,
but also provides access to its outputs, enhances data flows, and enables global cooperation; serving as amultilateral forum for discussions on the normative development of intellectual property policy; and facilitating theuse of IP for social, cultural and economic development, by mainstreaming development considerations anddelivering development cooperation activities horizontally across all of the Organization’s programs.
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 which provides the appropriations that constitute thebudgetary expenditure authorizations approved by the Assemblies for the financial period. The approval of theappropriations provides the authority for the Director General to commit and authorize expenses and to makepayments 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.

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) which represent those prevailingat the date of the transactions. Both realized and unrealized gains and losses resulting from the settlement of suchtransactions and from the translation at the reporting date of assets and liabilities denominated in currencies otherthan WIPO’s functional currency are recognized in the Statement of Financial Performance.
28

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

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.
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:

29

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

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

Estimated useful life

Software externally acquired

5 years

Software internally developed

5 years

Licenses and rights

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.

30

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

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
31

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

established for providing advance financing of appropriations should there be a temporary liquidity shortfall, and forsuch 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.

Changes in Presentation
In the Statement of Financial Position the basis for allocating long-term employee benefit liabilities between current
and non-current liabilities has been modified. Previously the current allocation was based on the expected expensein the following twelve months, and this has been changed to reflect the amounts expected to be settled in thefollowing twelve months. This modification results in a presentation of the current portion of benefits included in thebenefit obligation as it stands at the reporting date. As a result of this change, 24.2 million Swiss francs has beenreallocated from current to non-current employee benefits in the 2019 comparative numbers in the Statement of
Financial Position.

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.

32

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

Note 3: Cash and Cash Equivalents
December 31,
2020

December 31,
2019(in thousands of Swiss francs)
Cash on hand

31

25

Deposits with banks

68,932

170,407

Term deposits less than 3 months

37,9203,000

Notice accounts

26,022

17,602

Total operating and core cash

132,905

191,034

Deposits with banks

10,635

14,997

Total strategic cash

10,635

14,997

Total cash and cash equivalents

143,540

206,031

December 31,
2020

December 31,
2019

Note 4: Investments(in thousands of Swiss francs)

Term deposits more than 3 months (operating cash)

116,000

17,000116

1,304

Derivative financial instruments
Current investments

116,116

18,304

Medium term Investment portfolio (core cash)

471,738

354,493

Long term Investment portfolio (strategic cash)

200,606

175,232

Non-current investments

672,344529,725

Total investments

788,460

548,029

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, 2020 is as follows:
Operating cash
investmentsCore cash
investments

Strategic cash
investments(in thousands of Swiss francs)
Investments fair value at January 1, 2020

17,000354,493

175,232

Additional investments made99,000263,17187,003

Dividends on non-current investments invested

-

2,054

1,159

Rebates on non-current investments invested

-

10

6

Disposal of non-current investments--163,302-70,708

Forex gains/(losses) on investments--6,231-3,823

Fair value increase/(decrease)
Investments fair value at December 31, 2020

33-

21,543

11,737116,000

471,738

200,606

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

Note 5: Receivables
December 31,
2020

December 31,
2019(in thousands of Swiss francs)
Assessed contributions

1,507

2,266

Voluntary contributions-

63

WCF arrears

40

40

Contributions receivable

1,547

2,369

PCT debtors

53,102

59,121Madrid debtors

201

654

Other receivables

7,735

7,241

Advances and prepayments

5,754

6,242

Exchange transactions receivable

66,79273,258

Total accounts receivable

68,33975,627

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.

Note 6: Intangible Assets
Movement 2020

Land surface
rightsSoftwareexternallyacquired

Softwareinternallydeveloped

Intangible
assets underdevelopment

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

34,290

760

4,419

261

39,730

Accumulated amortization-10,477-703-4,089--15,269

23,813

57

330

261

24,461

Additions

-

-

270

-

270

Transfers

-

-

261

-261

-

Disposals

-

-27

-

-

-27

Disposals amortization

-

27

-

-

27

-440

-57

-206

-

-703

-440

-57

325

-261

-433

Net carrying amount
Movements in 2020:

Amortization
Total movements in 2020
December 31, 2020
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 amount34

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

Movement 2019Land surface
rightsSoftwareexternallyacquired

Softwareinternallydeveloped

Intangible
assets underdevelopment

Total(in thousands of Swiss francs)
January 1, 2019
Gross carrying amount

34,290

1,115

4,419

-

39,824

Accumulated amortization-10,038-990-3,802--14,830

24,252

125

617

-

24,994

Additions

-

-

-

261

261

Transfers

-

-

-

-

-

Disposals

-

-355

-

-

-355

Disposals amortization

-

355

-

-

355

-439

-68

-287

-

-794

-439

-68

-287

261

-533

Gross carrying amount

34,290

760

4,419

261

39,730

Accumulated amortization-10,477-703-4,089--15,269

23,813

57

330

261

24,461

Net carrying amount
Movements in 2019:

Amortization
Total movements in 2019
December 31, 2019

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.

35

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

Note 7: Property, Plant and Equipment
Movement 2020

Buildings

Land

Equipment

Total(in thousands of Swiss francs)

January 1, 2020
Gross carrying amount

401,28132,086

7,776

Accumulated depreciation-71,715--5,889-77,604

329,566

32,086

1,887

363,539

1,817

-

905

2,722

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

Buildings

Land

Equipment

Total

Net carrying amount

441,143

Movements in 2020:
Additions

Depreciation
Total movements in 2020
December 31, 2020

Net carrying amount

Movement 2019(in thousands of Swiss francs)

January 1, 2019
Gross carrying amount

393,192

30,820

7,412

Accumulated depreciation-62,678--6,358-69,036

330,51430,8201,054

362,388

8,158

-

1,139

9,297

Revaluation

-

1,266

-

1,266

Disposals

-69

-

-775

-844

Disposals depreciation

69

-

775

844

-9,106--306-9,412

-948

1,266

833

1,151

Gross carrying amount

401,28132,086

7,776

441,143

Accumulated depreciation-71,715--5,889-77,604

329,566

32,086

1,887

363,539

Net carrying amount

431,424

Movements in 2019:
Additions

Depreciation
Total movements in 2019
December 31, 2019

Net carrying amount

WIPO holds fully depreciated equipment which is still in use for a gross carrying amount of 3.1 million Swiss francs.
In 2020 the Organization increased the capitalization threshold for equipment from 5,000 Swiss francs to 10,000
Swiss francs. As a result, equipment with a gross carrying value of 1.9 million Swiss francs was derecognized in
the financial statements. The land upon which the New Building was constructed was initially acquired by theOrganization at a cost of 13.6 million Swiss francs in 1998, but is held at fair value based on International Valuation
Standards as determined by an independent appraiser. An updated valuation of the land was performed by anindependent appraiser at December 31, 2020. This valuation indicated a further increase in the fair value of theland of 1.8 million Swiss francs, compared to the previous valuation performed in 2019. The net result of all periodic
36

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

revaluations totalling 20.4 million Swiss francs is included in the Revaluation Reserve Surplus which forms part of
WIPO’s net assets. Market value was estimated by capitalizing at an appropriate investment yield the future
potential income stream from the property. The potential income is based on comparable rentals in the market andtakes into account the quality of the spaces as well as the location. The yield has been selected by reference to theperceived quality and duration of the income and the potential for further rental growth and is cross-referenced by
the evidence provided by comparable sales.
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, 2020, the Organization held a total of 592 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 592
items are classified as follows:
Number of Works of Art

2020

2019

Framed artwork

171

164

Sculptures

78

75

Decorative objects

80

71

Furniture38

38

Tapestries/carpets

33

33

Other commemorative objects

28

26

Primitive arts

21

21

Ceramic/porcelain

20

20

Silverware

18

18

Other works of art

105

101

Total

592

567

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,
2020

December 31,
2019(in thousands of Swiss francs)
Loan to FIPOI

7,995

7,878

Advance for FIPOI concessionary loan-

118

FIPOI loan amortization

-

189

7,995

8,185

Total other non-current assets

In 1991 the Organization entered into an agreement with the International Centre of Geneva Foundation (FCIG)
related to the construction of a building on rue des Morillons in Geneva, Switzerland. The agreement provided for
the Organization to advance the initial sum of 10.0 million Swiss francs, plus a further sum of 1.0 million Swiss
francs representing interest on the initial advance, equaling a total advance of 11.0 million Swiss francs. In 2016
the FCIG was absorbed by law into the Foundation for Buildings for International Organizations (FIPOI).
WIPO also entered into an agreement to lease the building from FCIG (subsequently amended to FIPOI). The
current lease agreement, which was updated and signed by WIPO in 2019, includes an annual amortization chargeof 188,679 Swiss francs against WIPO’s advance to FIPOI. On termination of the lease, upon vacating the premises
WIPO is to be repaid the balance of the 11.0 million Swiss francs advance after amortization. FIPOI will also retain
1.0 million Swiss francs from the advance for restoration of the building to its original condition.
37

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

Note 9: Payables and Accruals
December 31,
2020

December 31,
2019(in thousands of Swiss francs)
Trade creditors - accounts payable

15,06022,805

Miscellaneous transitory liabilities

42

837

Other trade creditors

429

394

15,531

24,036

Total payables and accruals

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,
2020

December 31,
2019(in thousands of Swiss francs)
Accumulated leave (posts)

2,034

679

Accumulated leave (temporary staff)

498

398

Separation benefits

306

564

Closed Pension Fund

312

292

Repatriation grant and travel

2,496

2,413

Home leave

1,470

373

Overtime and credit hours
Education grant
Performance rewards

66

199

1,869

1,901

443

667

After-Service Health Insurance

4,911

3,796

Total current employee benefit liabilities

14,405

11,282

Closed Pension Fund

2,849

2,099

Accumulated leave (posts)

18,711

14,387

Repatriation grant and travel

11,532

18,558After-Service Health Insurance

447,844309,898

Total non-current employee benefit liabilities

480,936

344,942

Total employee benefit liabilities

495,341356,224

Long-term employee benefits include After-Service Health Insurance (ASHI), repatriation grant and travel, andaccumulated leave (posts). Note that the basis for allocating long-term employee benefit liabilities between current
and non-current liabilities has been modified in the 2020 financial statements. Previously the current allocation was
based on the expected expense in the following twelve months, and this has been changed to reflect the amounts
expected to be settled in the following twelve months:
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, 2021, monthly medical premiums amount to 596
Swiss francs for adults and 265 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

38

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

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 normally accrue up to 15 daysof annual leave in a given year, and a total accumulated balance of 60 days. Notwithstanding the foregoing, due tothe COVID-19 pandemic exceptional measures were introduced to allow the accrual of up to 20 days annual leavein 2020, and a total accumulated balance of 80 days to be carried forward to 2021. On separation from service,staff in posts who have accumulated annual leave can receive a payment in lieu of an amount equivalent to theirsalary 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, 2020

December 31, 2019

After-Service Health Insurance
Discount rate

0.30%

0.50%

Discount rate currency

CHF, EUR, USD (weighted)

CHF, EUR, USD (weighted)

Medical cost trend rate

2.90%

3.00%

50-59

10.00%

3.00-3.50%

60-64

8.00%

2.50%

65-69

4.00%

2.00%

70-74

2.00%

1.50%

75-79

1.00%

1.00%

80+

0.00%

0.00-0.50%

2.10%

3.00%

Age-grading rates:

Repatriation Grant and Travel
Discount rate
Discount rate currency

USD

USD

Rate of salary increase

2.78%

2.54%

0.00%

0.10%

Accumulated leave (posts)
Discount rate
Discount rate currency

CHF

CHF

Rate of salary increase

UNJSPF rates

UNJSPF rates

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,
2020

December 31,
2019(in thousands of Swiss francs)
Interest cost

1,559

2,711

Current service cost
Expense recognized in the Statement of Financial
Performance

26,55915,461

28,11818,172

39

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

The table below details the changes in the ASHI defined benefit obligation, including the impact of actuarial
gains/(losses):
December 31,
2020

December 31,
2019(in thousands of Swiss francs)
Defined benefit obligation at beginning of year

313,694

303,128

Interest cost

1,559

2,711

Current service cost

26,55915,461

Contribution paid

-3,928-3,731

2,400-37,983

Medical cost trend rate

-9,234-44,923

Discount rate and currency weighting

19,66842,491(Gain)/loss on change in financial assumptions

10,434-2,432

Medical claims age-grading

106,499

38,257

Actuarial (gain)/loss on obligation:
Experience (gain)/loss

Other demographic assumptions-4,462-1,717(Gain)/loss on change in demographic assumptions

102,037

36,540Defined benefit obligation recognized at end of year

452,755

313,694

As can be seen in the table above, the most significant movement in the 2020 ASHI liability is the result of actuarial
losses from changes to the medical claims age-grading factors. Consistent with the approach taken in 2019, in the2020 actuarial calculation age-grading factors have been applied to premiums to derive the expected future
underlying medical claims costs for active staff, retirees and dependents. The 2020 age-grading factors were basedon an analysis of claims data over a four-year period which led to changes in the factors compared to those appliedin the prior year. No specific modifications were made to any of the 2020 actuarial assumptions, including thoserelated to medical claims or mortality rates, as a result of the COVID-19 pandemic. Currently there is insufficientavailable information to understand the long-term effects of COVID-19 on these future trends. Contributions paidby the Organization for ASHI totaled 3.9 million Swiss francs for 2020 (3.7 million Swiss francs in 2019). Expected
contributions to ASHI in 2021 are 4.9 million Swiss francs. The weighted average duration of the defined benefit
obligation as at December 31, 2020, was 23 years. The following table details the present value of the defined
benefit obligation and experience adjustments on the ASHI liability for 2020 and the previous four years:
2020

2019

2018

2017

2016

(in thousands of Swiss francs)
Defined benefit obligation

452,755

313,694

303,128

304,376

320,888

2,400-37,983-3,092-17,122

3,377

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
0.05%

Discount rate as
applied
0.30%

0.25 per cent increasein discount rate
0.55%

(in thousands of Swiss francs)
Defined benefit obligation as at
December 31, 2020
Per cent variation

479,052

452,755

5.8%

1 per cent decrease in
medical cost trend rate
1.90%

428,350-5.4%

Medical cost trend rate
as applied
2.90%

1 per cent increase in
medical cost trend rate
3.90%

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

367,956

Per cent variation-18.7%

40

452,755

563,671
24.5%

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

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 a roll forward of theparticipation data as at December 31, 2019 to December 31, 2020 will be 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 144.2 per cent (139.2 per cent in the 2017 valuation). The funded ratio
was 107.1 per cent (102.7 per cent in the 2017 valuation) 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 (2017,2018 and 2019) amounted to 7,546.9 million US dollars, of which 1.77 per cent was contributed by WIPO (including
participants and Organization contributions).
During 2020, WIPO contributions (including Organization contributions only) paid to the Fund amounted to 29.0
million Swiss francs (29.2 million Swiss francs in 2019). Expected contributions due in 2021 are approximately 28.1
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.

41

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

Note 11: Transfers Payable
December 31,
2020

December 31,
2019(in thousands of Swiss francs)
Madrid Union fees

60,75959,498Madrid Union deposits

26,443

26,156

Hague Union distribution

792

967

Madrid and Hague Union repartition fees

6,254

5,099

AMC deposits

1,083

1,467

PCT International Searching Authorities

1,880

1,163

RO search fees due to International Searching Authorities

1,017

142

Total transfers payable

98,22894,492The 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,
2020

December 31,
2019(in thousands of Swiss francs)
Madrid Union deposits

7,604

8,145

Industrial design deposits

1,970

4,757

Lisbon Union deposits

76-

PCT/IBRO deposits

413

755

4,061

4,207

PCT system deferred revenue

286,078

281,820

Madrid system deferred revenue

2,597

2,752

Hague system deferred revenue

423

215

Non-exchange deferred revenue

Advance payment of contributions

14,556

11,004FIPOI deferred revenue

59

132

Other deferred revenue

4-317,841

313,787FIPOI deferred revenue

3,637

3,672

Total non-current advance receipts

3,637

3,672

321,478

317,459

Total current advance receipts

Total advance receipts

42

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

Note 13: Provisions(in thousands of Swiss francs)
Balance as at December 31, 2018

5,588

Movements in 2019:
Additional provisions made

1,621

Amounts used

-115

Unused amounts reversed-5,283

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

Provisions at December 31, 2020, 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 425,000 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 2020, 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.

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 1.6 million Swiss francs in 2020 (1.6 million Swiss francs in 2019).The value of future minimum lease
payments under non-cancellable operating leases is shown in the table below:
Operating Leases

December 31,
2020

December 31,
2019(in thousands of Swiss francs)
Not later than one year

854

531

Later than one year and not later than five years

647

150

-

-

1,501

681

Later than five years
Total minimum lease payments

43

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

The Organization leases equipment under a finance lease arrangement. At the reporting date the net carrying
amount of equipment held under finance leases is 0.5 million Swiss francs. The total value of future minimum lease
payments under finance leases, and their present value, is shown in the table below:
Finance Leases

December 31,
2020

December 31,
2019(in thousands of Swiss francs)
Not later than one year

163-

Later than one year and not later than five years

504

-

-

-

Total minimum lease payments

667-

Future finance charges

-148

-

Present value of minimum lease payments

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 subject to notification periods specified in the agreements.
The total amount of rental income from these arrangements was 0.6 million Swiss francs in 2020 (0.6 million Swiss
francs in 2019).

Note 16: Related Party Transactions
2020

2019

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

8.75

3,268

9.00

3,329

Senior Officers

14.50

4,167

13.58

4,285

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 2020 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.

44

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

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 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 2020
Operating

Investing

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

168,485

Depreciation and amortization--

168,485-9,773---9,773

Capitalization/disposal PPE and intangible assets

-

2,456

-

2,456

Finance lease adjustments

-

-

-518

-518

-14,619---14,619

Changes in employee benefit liabilities
Change in allowance for receivables

59

-

-

59

Special Accounts revenue recognition-3,620---3,620Total Basis differences-27,953

2,456

-518

-26,015

Projects financed from reserves-10,219-10,219--

Special Accounts

3,620

-

-

3,620

Total Entity differences-6,599---6,599133,933

2,456

-518

135,871

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

45

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

Note 18: Expenses

2020

2019

(in thousands of Swiss francs)

Posts

223,544

231,258

Temporary staff

8,493

9,969

Other staff costs

1,698

1,284

233,735

242,511

Total Personnel expenditure
Internships

519

564

WIPO fellowships

4,959

4,619

Total Interns and WIPO fellowships

5,478

5,183

Staff missions

536

5,652

Third-party travel549

10,485Training and related travel grant

687

1,372

Total Travel, training and grants

1,772

17,509Conferences

1,348

4,414

Publishing

32

20

Individual contractual services

12,285

14,532Other contractual services

74,954

77,157

Total Contractual services

88,61996,123

Premises and maintenance

18,49918,996

Communication

1,274

2,123

Representation and other operating expenses

587

688

United Nations joint services

513

711

Total Operating expenses

20,87322,518Supplies and materials

4,866

5,017

Furniture and equipment

474

1,375

Equipment and supplies

5,340

6,392

Depreciation and amortization

9,773

10,205240

1,020

365,830

401,461

Finance costs
Total expenses

46

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

Note 19: Investment Gains/(Losses)
2020

2019

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

33,28042,192

Dividends

4,944

5,220

Interest on current accounts and deposits-42Interest on investments

4

2

-446

-396

-10,168-2,509Investment management and administration cost
Exchange gain (loss) on investments
Exchange gain (loss) on derivative financial instruments

5,819-2,409Total investment gains/(losses)

33,42942,102

The fair value increase on investments of 33.3 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,
2020

December 31,
2019(in thousands of Swiss francs)
Financial assets
Amortized cost

330,120300,294

Fair value through surplus and deficit

672,460

531,029

1,002,580

831,323

Amortized cost

185,881

186,151

Total carrying value

185,881

186,151

Total carrying value

Financial liabilities

47

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

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, 2020, is as follows:

48

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

Short-Term Credit Rating

A-1+

December 31, 2020
Cash and cash equivalents
Investments

Per cent

A-1

A-2/P-2

Unrated(1)

Total(in thousands of Swiss francs)
1,183

141,991335

31

143,540-

116,000-

672,344788,3441,183

257,991335

672,375

931,884

0.1%

27.7%

0.0%

72.2%

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, 2020, theOrganization held US dollar investments totalling 105.9 million Swiss francs. 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 3.40 per cent and 5.30 per cent respectively.

49

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

Note 21: Events After the Reporting Date
WIPO’s reporting date is December 31, 2020 and its financial statements were authorized for issue on the samedate as the External Auditor’s opinion.
There have been no material events, favourable or unfavourable, that occurred between the reporting date and thedate when the financial statements were authorized for issue that would have had a material impact on thesefinancial 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 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 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 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 1,279,092 Swiss francs in 2020, the PCT Union has
assumed the financing of the deficit of the Lisbon Union in 2020; b) the PCT Union has assumed the financingof the deficit of the Hague Union amounting to 11,024,535 Swiss francs. The amounts will be reimbursed by
the Lisbon Union and the Hague Union to the PCT Union, as soon as the level of reserves of the Unions soallow.
Note 5: Actuarial gains/(losses) as at December 31, 2020 have been allocated based on the relative share ofheadcounts for 2020.

50

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

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

17,492----358,557

76,209

6,667

Publications
Other/miscellaneous
Arbitration and Mediation
S ub- tota l re ve nue on budge ta ry ba sis

TO TAL REV ENUE

7

9,384

26,876-441,440

6

432

60

-

-

-

498

199

295

525

210

187

71

1,487

376

356

962

397

-

-

2,091

18 , 0 7 3359,640

77,756

7,274

19 4

9,455

472,392

Miscellaneous revenue projects financed fromreserves
IPSAS adjustments to revenue

-

9

9

8

8

-

42

59

0

0

0

-

8

- 4,221- 4,162

18 , 14 1

359,649

77,764

7,282

202

5,234

468,272

124

1,726

77

-

-

-

1,927

EX P ENS ES
1Patent Law

2

Trademarks, Industrial Designs & Geographical
Indications

376

-

1,221

282

88

-

1,967

3

Copyright and Related Rights

6,863

987

109

-

-

-

7,959

4

Traditional Knowledge, Traditional Cultural Expressions& Genetic Resources

2,558

-

-

-

-

-

2,558

5

The PCT System-

98,693

-

62

-

-

98,755

6

Madrid System

7

WIPO Arbitration and Mediation Center

8

-

-

26,572170

39-

26,781

985

931

2,519

1,041

-

-

5,476

Development Agenda Coordination

16

1,138

125

-

-

-

1,279

9

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

127

9,671

1,445

267

89

-

11,59910Transition and Developed Countries

29

2,729

585

274

34

-

3,651

11

The WIPO Academy

70

5,176

569

166

-

-

5,981

12

International Classifications and Standards

278

2,161

618

31

-

-

3,088

13

Global Databases

14

3,466

1,287

343

-

-

5,110

14

Services for Access to Information and Knowledge

29

2,820

565

96

-

-

3,510

15

Business Solutions for IP Offices

63

4,693

516

-

-

-

5,272

16

Economics and Statistics

44

3,278

360

-

-

-

3,682

17

Building Respect for IP

22

1,653

182

-

-

-

1,857

18

IP and Global Challenges

29

2,159

237

-

-

-

2,425

19

Communications

86

6,343

697

58

-

-

7,184

20

External Relations, Partnerships and External Offices

59

4,653

748

278

100

-

5,838

21

Executive Management

643

7,740

2,623

648

41

-

11,69522

Program and Resource Management801

10,008

4,456

990

51

-

16,30623

Human Resources Management and Development

679

8,170

2,768

650

44

-

12,311

24

General Support Services

912

10,969

3,717

872

59

-

16,52925

Information and Communication Technology

1,346

18,141

5,913

1,339

87

-

26,82626

Internal Oversight

130

1,564

530

124

8

-

2,356

27

Conference and Language Services

809

9,735

3,298

774

52

-

14,66828

Information Assurance, Safety and Security

608

7,315

2,478

582

39

-

11,02230

SMEs and Entrepreneurship Support

29

2,136

235

-

-

-

2,400

31

The Hague System

-

-

-

7,219

-

-

7,219

32

Lisbon System

-

-

-

-

650

-

650

17 , 7 2 9228,055

64,45016 , 2 6 6

1, 3 8 1-

327,881S 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
IPSAS adjustments to budgetary expenses and special
accounts
IPSAS adjustments to projects financed from reserves
TO TAL EX P ENS ES

106

8,343

957

855

-

-

10,261

17 , 8 3 5

236,398

65,407

17 , 12 1

1, 3 8 1-

3 3 8 , 14 2

-

-

-

-

-

5,835

5,835

1,297

16,820

4,719

1,186

101

- 601

23,522- 38- 1,471

- 160

-

-

-

- 1,669

19 , 0 9 4

2 5 1, 7 4 769,966

18 , 3 0 7

1, 4 8 2

5,234

365,830

Investment gains/(losses)

1,745

27,499

4,185

-

-

-

33,429S URP LUS / (DEFICIT) FO R THE Y EAR

792

13 5 , 4 0 1

11, 9 8 3

- 11, 0 2 5- 1, 2 8 0-

13 5 , 8 7 1

26,370427,233

75,531- 43,659- 2,698-

482,777- 4,726- 86,189- 23,634- 3,646- 355-- 118,550

2 1, 6 4 4

3 4 1, 0 4 4

5 1, 8 9 7- 47,305- 3,053-364,2272020 surplus/(deficit)

792

135,401

11,983- 11,025- 1,280-

135,871

Adjustment to Revaluation Reserve Surplus

99

1,277

361

91

8

-

1,836

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 d27,2615 6 3 , 9 1187,875- 54,593- 3,970-

620,484

Actuarial gains/(losses) as at December 31, 2020

- 11,471- 166,281- 44,634- 10,066- 969-- 233,421

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

15 , 7 9 0397,630

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

387,063

Ne t Asse ts a s a t De c e mbe r 3 1, 2 0 19 a c tua ria l ga ins/ (losse s) e xc lude dActuarial gains/(losses) as at December 31, 2019
Ne t Asse ts a s a t De c e mbe r 3 1, 2 0 19

51

WIPO ANNUAL FINANCIAL REPORT AND FINANCIAL STATEMENTS 2020

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 2020
and therefore no summary statement is required.

52

World Intellectual Property Organization34, chemin des Colombettes
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WIPO Reference RN2021/18E