Company: AZN
Filing Date: 2025-02-18
Form Type: 20-F
Source: 0001104659-25-014750
Chunk: 8

Company: ASTRAZENECA PLC
Filing Date: 2025-02-18
Form: 20-F
Item: Item 18
Chunk 8
---
iii) evaluating the reasonableness of management’s assessment regarding whether an adverse outcome is probable and estimated reliably; (iv) inspecting certain external legal documents; (v) evaluating the sufficiency of the Group’s legal provisions and contingent liabilities disclosures; and (vi) where appropriate, considering the scope, preliminary findings and conclusions of investigations with the assistance of professionals with specialised skill and knowledge.

57

​

Recognition, measurement and disclosure of tax liabilities for uncertain tax treatments
As described in the Group Accounting Policies and Note 30 to the consolidated financial statements, the Group faces a number of audits and reviews in jurisdictions around the world and, in some cases, is in dispute with the tax authorities. As at 31 December 2024 the total net tax liability recognised in respect of uncertain tax positions is $1,321 million and the potential for additional liabilities where the possibility of the additional liabilities falling due is more than remote is (a) $422 million related to transfer pricing matters including items under tax audit, and (b) $214 million related to other tax liabilities where the Group estimates the potential for additional liabilities above the amount provided. Tax liabilities recognised for uncertain tax treatments require management to make key judgements with respect to the outcome of current and potential future tax audits, and actual results could vary from these estimates. Accruals for tax liabilities are measured using either the most likely amount or the expected value amount depending on which method management expects to better predict the resolution of the uncertainty.
The principal considerations for our determination that performing procedures relating to recognition, measurement and disclosure of tax liabilities for uncertain tax treatments is a critical audit matter are the significant judgement made by management to estimate the tax liability, and the significant estimation uncertainty relative to the expectation of the resolution of tax audits or other disputes with tax authorities. This in turn led to a high degree of auditor judgement, subjectivity, and effort in performing procedures and evaluating management’s key judgements with respect to the outcome, estimation and recognition of current and potential future tax audits. In addition, the audit effort involved the use of professionals with specialised skill and knowledge.
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 the identification, recognition and measurement of accruals for tax liabilities. These procedures also included, among others, testing management’s process for determining tax liabilities and uncertain tax treatments for which no tax liability is recognised; i) evaluating the completeness of management’s assessment of the identification of