Company: RTNTF
Filing Date: 2025-02-20
Form Type: 20-F
Source: 0001628280-25-006642
Chunk: 285

Company: RIO TINTO LTD
Filing Date: 2025-02-20
Form: 20-F
Chunk 285
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 ofbenefits that are expected to be paid out, discounted to the balance sheet date. There is significantestimation uncertainty pertaining to the most significant assumptions used in accounting for pensionplans, namely the discount rate, the long-term inflation rate and mortality rates.                                                                                                                                                                                                                                                                                                                              |
| Renewable powerpurchase agreementsaccounted for asderivatives (note 24)              |    a |    0 | A discounted cash flow methodology is used to determine the fair value of the derivative.Key inputs into the valuation model include forward electricity price curves, which are used toforecast future floating cash flows, estimated electricity generation and credit-adjusted discountrates. Long-term forward electricity prices are a source of a significant estimation uncertainty asthey are not readily available and may be impacted by renewable market developments, whichare presently unknown.                                                                                                                                                                                                           |

f. Currency

| Other relevant judgements - identification of functional currencyWe present our financial statements in USD, as that presentation currency most reliably reflects the global business performance of theGroup as a whole.The functional currency for each subsidiary, unincorporated arrangement, joint operation and equity accounted unit is the currency of theprimary economic environment in which it operates. For businesses that reside in developed economies, the functional currency is generallythe currency of the country in which it operates because of the dominance of locally incurred costs. If the business resides in an emergingeconomy, the USD is generally identified to be the functional currency as a higher proportion of costs, particularly imported goods andservices, are agreed and paid in USD, in common with other international investors. Determination of functional currency involvesjudgement, and other companies may make different judgements based on similar facts.The determination of functional currency affects the measurement of non-current assets included in the balance sheet and, as a consequence, thedepreciation and amortisation of those assets included in the income statement. It also impacts exchange gains and losses included in the incomestatement and in equity. We also apply judgement in determining whether settlement of certain intragroup loans is neither planned nor likely in theforeseeable future and, therefore, whether the associated exchange gains and losses can be taken to equity. During2024,A$15,717million(2023:A$15,102million) of intragroup loans continued to meet these criteria; associated exchange gains and losses are taken to equity. |

On consolidation, income statement items for each entity are translated from the functional currency into USD at the full-year average rate of

exchange, except for material one-off transactions, which are translated at