www.se.com 352 Schneider Electric Universal Registration Document 2021 Chapter 5 – Consolidated financial statements at December 31, 2021 Note 1: Accounting policies 1.1 – Accounting standards The consolidated financial statements have been prepared in compliance with the international accounting standards (IFRS) as adopted by the European Union as of December 31, 2021. The same accounting methods were used as for the consolidated financial statements for the year ended December 31, 2020. The following standards and interpretations that were applicable during the period did not have a material impact on the consolidated financial statements as of December 31, 2021: • amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 – Interest Rate Benchmark Reform – Phase 2 ; • amendments to IFRS 16 – Leases COVID-19-Related Rent Concessions ; The Group did not apply the following standards and interpretations for which mandatory application is subsequent to December 31, 2021: • standards adopted by the European Union: − amendments to IFRS 16 – Leases COVID-19-Related Rent Concessions beyond 30 June 2021 ; − amendments to IFRS 3 – Business Combinations: Reference to the Conceptual Framework ; − amendments to IAS 16 – Property, Plant and Equipment: Proceeds before Intended Use ; − amendments to IAS 37 – Provisions, Contingent Liabilities and Contingent Assets: Onerous Contracts – Cost of Fulfilling a Contract ; − Annual Improvements to IFRS Standards 2018-2020. • standards not yet adopted by the European Union: − amendments to IAS 1 – Presentation of Financial Statements: Classification of Liabilities as Current or Non-current – Deferral of Effective Date ; − amendments to IAS 1 – Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting policies ; − amendments to IAS 8 – Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates ; − amendments to IAS 12 – Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction ; The Group is currently assessing the potential effect on the Group’s consolidated financial statements of the standards not yet applicable as of December 31, 2021. At this stage of analysis, the Group does not expect any material impact on its consolidated financial statements. The Group is also looking at the potential effect of the final agenda decision issued by the IFRIC in the first half of 2021 with regards to recognition of the cost of configuring and customising software provided in the cloud as part of a software as a service (SaaS) agreement. At this stage of analysis, the Group does not expect any material impact on its consolidated financial statements. Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 – Interest Rate Benchmark Reform – Phase 2 On September 26, 2019 and August 27, 2020, the IASB issued amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 related to the reform of interest rate benchmarks used in many financial instruments. Those amendments are divided into two phases: • phase 1, applicable starting January 1, 2020, allows uncertainties about the future of reference rates to be disregarded while assessing the effectiveness of hedging relationships and/or while evaluating the highly probable nature of the hedged risk; • phase 2, applicable starting January 1, 2021, specifies the accounting impacts of the effective replacement of interest rate benchmarks. The application of phase 2 has no impact for the Group in the absence of any effective change in the benchmark indexes in the Group’s contracts as of December 31, 2021. The transition to the new benchmarks will not have a material impact on the Group financial statements. IFRIC decision – Attribution of benefits to periods of service IAS 19 – Employee Benefits The Group has taken into account the impact of the IFRIC agenda decision issued in April 2021 when measuring employee benefit obligations. This decision clarifies the periods over which employee benefits should be attributed in allocating the IAS 19 expense. The impact as of December 31, 2021 represents a non-material decrease in this commitment (Note 20). COVID-19-Related Rent Concessions amendments to IFRS 16 – Leases On May 28, 2020, the IASB issued COVID-19-Related Rent Concessions amendment to IFRS 16 – Leases . The amendment provides relief to lessees from applying IFRS 16 guidance on lease modification accounting for rent concessions arising as a direct consequence of the COVID-19 pandemic. On March 31, 2021, the IASB published a second amendment to IFRS 16, extending by one year the period of application of the COVID-19- Related Rent Concessions amendment to IFRS 16 – Leases published in May 2020. The amendment applied to annual reporting periods beginning on or after January, 1, 2021. As a practical expedient authorized by the amendment, the Group elected, for the concessions that meet the amendment’s criteria, not to assess whether a COVID-19 related rent concession from a lessor is a lease modification. This amendment had no significant impact on the consolidated financial statements of the Group. 5.5 Notes to the consolidated financial statements