Company: AZN
Filing Date: 2025-02-18
Form Type: 20-F
Source: 0001104659-25-014750
Chunk: 5

Company: ASTRAZENECA PLC
Filing Date: 2025-02-18
Form: 20-F
Item: Item 18
Chunk 5
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 conditions and (ii) high degree of auditor judgement, subjectivity, and effort in evaluating management’s significant assumptions related to aggregate future sales levels, segment mix and customers’ contractual performance, the channel inventory levels, and lag time.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s recognition and measurement of the Managed Care, Medicaid, and Medicare Part D rebate accruals. These procedures also included, among others, (i) developing an independent estimate of these accruals; (ii) comparing our independent estimate to the accruals recorded by management; (iii) assessing the effect of any adjustments to prior years’ accruals in the current year’s results; and (iv) testing actual payments made and rebate claims processed by the Group, and evaluating those claims for consistency with the contractual and mandated terms of the Group’s arrangements. Developing the independent estimate of the accruals involved assessing the terms of the specific rebate programmes and/or contracts with customers; historical revenue data; market demand and market conditions in the US; third party information on inventory held by direct and indirect customers; and the historical trend of actual rebate claims paid.
Impairment assessment of the product, marketing and distribution rights and other intangibles
As described in the Group Accounting Policies and Note 10 to the consolidated financial statements, the Group has product, marketing and distribution rights totalling $35,734 million and other intangibles totalling $771 million (hereafter the intangible assets) at 31 December 2024. Management performs an impairment trigger assessment for all intangible assets. Intangible assets under development and not available for use are tested annually for impairment and other intangible assets are tested when there is an indication of impairment loss or reversal. Where testing is required, the recoverable amount of the assets is estimated in order to determine the extent of impairment loss or reversal. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the Cash Generating Unit (CGU) to which it belongs. Group level budgets and forecasts include forecast capital investment and operational impacts related to sustainability projects, as well as inflationary impacts, and form the basis for the value in use models used for impairment testing. An asset’s recoverable amount is determined as the higher of an asset’s or CGU’s fair value less costs to sell or value in use, in both cases using