Company: PLSAY
Filing Date: 2025-05-09
Form Type: 20-F
Source: 0001884082-25-000012
Chunk: 295

Company: Polestar Automotive Holding UK PLC
Filing Date: 2025-05-09
Form: 20-F
Item: Item 15
Chunk 295
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 that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. The following control deficiencies constitute material weaknesses, either individually or in the aggregate, and are included in management's assessment:

Control Environment

The Company did not design and implement an effective control environment based on the criteria established in the COSO Framework and identified the following material weakness:

The finance function does not have fully formalized processes nor throughout the organization sufficient number of personnel within finance and operations with the appropriate accounting and SEC regulatory reporting expertise to perform appropriate and timely reviews of financial reporting matters, the financial statements and disclosure, key controls, and work performed by external advisors related to financial reporting and technical accounting.

This control environment material weakness contributed to the other material weaknesses identified below.

Control Activities

The Company did not design and implement effective control activities based on the criteria established in the COSO Framework. The associated deficiencies resulted in the following material weaknesses, relating to a lack of effectively designed and implemented controls over:

•(i) Segregating the function of recording and approving journal entries and the preparation and review of account reconciliations, and (ii) validating the completeness and accuracy of data used in the controls over reviewing journal entries.

• Recognition of vehicle revenue in accordance with IFRS 15 in regard to (i) fleet customers’, private individuals’, dealers’ and importers’ sales of vehicles’ revenue streams over the completeness and accuracy of data used in the controls, and (ii) fleet customers’ and private individuals’ sales of vehicles’ revenue streams over the precision of review in management review controls. Further, there were insufficient controls over the completeness and accuracy of data used in the calculations of deferred revenue associated with sales of vehicles. In addition, the Company’s controls related to appropriately identifying and valuing the performance obligations to defer revenue related to sales of vehicles were not operating with the right precision.

• The existence, completeness, and valuation of inventory, including the net realizable value assessment.

• The completeness and accuracy of the data used in the existence, completeness and classification of current versus non-current liability to repurchase vehicles sold under its sales of vehicles with repurchase obligations arrangements.

• Consideration of multiple cash generating units and changes in certain macroeconomics, industry, and market conditions related to the impairment test of intangible assets Further, there were insufficient review controls over the completeness and accuracy of the data used in the impairment test.

• The completeness and accuracy of accrued expenses and accounts payable as well as the precision in the review