Company: MT
Filing Date: 2025-03-10
Form Type: 20-F
Source: 0001243429-25-000017
Chunk: 333

Company: ArcelorMittal
Filing Date: 2025-03-10
Form: 20-F
Chunk 333
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, the Company’s evaluation ofgoodwill for impairment at the group of cash-generating units (“GCGU”) level, and PP&E aspart of the relevant CGU, involves a comparison of the recoverable amount of each GCGU orCGU to the carrying amount. Key assumptions that had a significant impact on the Company’sestimate of the recoverable amounts of GCGUs and CGUs, (“the Relevant GCGUs andCGUs”), included future volumes of shipments, future selling prices, variable costs anddiscount rate. Changes in these assumptions could have a significant impact on therecoverable amount of a GCGU or CGU. There are significant judgments made bymanagement to estimate these assumptions, including as it relates to the impact of the war inUkraine, both specifically on the Company’s Ukrainian operations, and more broadly, theimpact of the war on the level of uncertainty associated with these assumptions. Furthermore,there are significant judgments made by management to assess the existence of impairmentreversal indicator. When such indicator is identified, management also performs an estimate ofthe recoverable amount of the impaired assets.The estimate of the recoverable amount also considers the Company’s exposure to certainclimate related risks, which affect the estimates of the future cash flows. Where there is a legalobligation in terms of carbon neutrality, the estimates of the future cash flows include thedecarbonization capital expenditure expected to be necessary to maintain the level ofeconomic benefits expected to be generated by the respective assets in the current condition.For the jurisdictions where there is no legal obligation for carbon neutrality, thedecarbonization related uncertainty was reflected in the risk premiums in the discount ratesapplied to determine the present value of the estimated future cash flows.Auditing the recoverable amounts of the Relevant GCGUs and CGUs was complex andrequired a high degree of auditor judgement and an increased extent of effort, including theinvolvement of valuation specialists, due to the significant estimation uncertainty andsubjective nature of the assumptions used in the estimates, as described above. |

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| How We Addressedthe Matter in OurAudit | We obtained an understanding, evaluated the design and tested the operating effectiveness ofcontrols over management’s valuation methodology and assumptions used for the estimatesof future cash flows. For example, we evaluated controls over the Company’s forecastingprocess used to develop the estimated future cash flows and controls over management’sdata included in the estimated future cash flows.We evaluated management’s ability to reasonably estimate future cash flows by comparingactual results to management’s historical forecasts.