Company: PLSAY
Filing Date: 2025-04-23
Form Type: 20-F/A
Source: 0001884082-25-000005
Chunk: 116

Company: Polestar Automotive Holding UK PLC
Filing Date: 2025-04-23
Form: 20-F/A
Chunk 116
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• We obtained an understanding of management’s process for identifying and reviewing contracts with all types of customers and determining the revenue recognition treatment in accordance with IFRS 15, Revenue from Contracts with Customers .

• For a sample of agreements with customers, focusing on those that differed from standard frame agreements, we obtained the contract and assessed the contract for terms that could impact the appropriateness of revenue recognition not identified by management. For those contracts identified with complex terms, we evaluated whether the Company appropriately accounted for those contracts in accordance with IFRS 15.

• We performed detailed transaction testing for a sample of revenue from the sale of vehicles, by obtaining and inspecting sales orders or contracts with the customer and other related source documents, including delivery documents, invoices, and cash receipts, as applicable, to determine that control had transferred to the customer.

• For a sample of revenue from the sale of vehicles for certain customers, we also confirmed directly with the customers the contract terms and conditions.

• We considered audit evidence obtained throughout our audit as to whether there is any wider information relevant to the point in time at which the Company recognizes revenue from the sales of vehicles.

Inventories — Refer to Notes 2 and 20 to the financial statements.

Critical Audit Matter Description

The Company’s inventories include new, used, and internal vehicles that are held in geographically disparate locations. Management employs a range of procedures, including physical counts to record and verify the existence, completeness, and condition of inventories. Inventories are valued at the lower of cost or net realizable value.

We identified the existence, completeness, and valuation of inventories as a critical audit matter because of the extent of effort in performing procedures and evaluating audit evidence due to the geographical dispersion of the Company’s inventories and. because of the high degree of auditor’s judgment and increased extent of effort required when performing audit procedures to evaluate the reasonableness of net realizable value of inventory.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to inventory existence, completeness and valuation included, but were not limited to:

• For a selection of inventory locations:

◦ we observed management's inventory count procedures close to the year-end date and performed independent sample counts and tested the Company’s roll-back of balances, between the time of the inventory count and December 31, 2023, or

◦ we obtained confirmations to test the inventory held at third-party locations.

• For a sample of inventory, we obtained third-party invoices