Company: PLSAY
Filing Date: 2025-05-09
Form Type: 20-F
Source: 0001884082-25-000012
Chunk: 322

Company: Polestar Automotive Holding UK PLC
Filing Date: 2025-05-09
Form: 20-F
Item: Item 19
Chunk 322
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 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 the existence, completeness and valuation of inventory 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/roll-forward of balances, between the time of the inventory count and December 31, 2024, or

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

• For a sample of inventory, we obtained third-party invoices and other relevant documents to recalculate the vehicle cost.

F-3

T able of Contents

• We evaluated the reasonableness of the Company’s methodology and key assumptions and judgments used to estimate the net realizable value of inventory by performing the following:

◦ We benchmarked selling prices to observable data to evaluate the impact of the significant assumptions of the net realizable value within the inventories to the carrying value.

◦ We performed corroborating inquiries with the personnel responsible for sales forecasting to evaluate the reasonableness of the product demand forecasts.

◦ We made inquiries of various personnel in the Company including finance and operations personnel, about the expected timing of the introduction of campaigns and discounts.

◦ We tested the mathematical accuracy of management’s calculations.

Intangible assets and goodwill, Property Plant and Equipment - Impairment of Polestar 3 and Internal Development projects,(i. e., Polestar 5, Polestar 6, and PX2 powertrain)CGUs - Refer to Note 2 to the financial statements

Critical Audit Matter Description

The Company’s evaluation of tangible and definite-lived intangible assets for impairment involves the comparison of the recoverable amount of each applicable cash generating unit (“ CGU”), to its carrying value on at least an annual basis, in line with International Accounting Standard 36Impairment of Assets. An impairment loss is recognized if the recoverable amount is lower than the carrying value. The recoverable amount is determined based on the higher of value in use (VIU) and fair value less costs to dispose (FVLCD). The company recorded an impairment of $205 million and $416 million relating to the Polestar 3 and Internal Development projects CGUs, respectively, during the