Company: MT
Filing Date: 2025-03-10
Form Type: 20-F
Source: 0001243429-25-000017
Chunk: 389

Company: ArcelorMittal
Filing Date: 2025-03-10
Form: 20-F
Chunk 389
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     |  364 |     |  190 |

The Company has established a number of programs for sales

without recourse of trade accounts receivable to various

financial institutions (referred to as true sale of receivables

(“TSR”). Through the TSR programs, certain operating

subsidiaries of ArcelorMittal surrender the control, risks and

benefits associated with the accounts receivable sold; therefore,

the amount of receivables sold is recorded as a sale of financial

assets and the balances are derecognized from the

consolidated statements of financial position at the moment of

sale. The Company classifies trade receivables subject to TSR

as financial assets that are held to collect or to sell and

recognizes them at FVOCI (see note 6). The fair value

measurement is determined based on the invoice amount net of

TSR expense payable, a Level 3 unobservable input. The TSR

expense is insignificant due to the rate applicable and the short

timeframe between the time of sale and the invoice due date.

Any loss allowance for these trade receivables is recognized in

OCI. As of December 31, 2024 and 2023, the total amount of

trade accounts receivables sold amounted to 4.4billion and 4.5

billion , respectively.

4.4 Inventories Inventories are carried at the lower of cost or net realizable value. Cost is determined using the average cost method. Costs of production in process and finished goods include the

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| Consolidated financial statements                          |
| (millions of U.S. dollar, except share and per share data) |

purchase costs of raw materials and conversion costs such as

direct labor and an allocation of fixed and variable production

overheads. Raw materials and spare parts are valued at cost,

inclusive of freight, shipping, handling as well as any other costs

incurred in bringing the inventories to their present location and

condition. Interest charges, if any, on purchases have been

recorded as financing costs. Costs incurred when production

levels are abnormally low are capitalized as inventories based

on normal capacity with the remaining costs incurred recorded

as a component of cost of sales in the consolidated statements

of operations.

Net realizable value represents the estimated selling price at

which the inventories can be realized in the normal course of

business after allowing for the cost of conversion from their

existing state to a finished condition