EBAY INC (Form: 10-K/A, Received: 05/10/2022 17:31:42)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K/A

Amendment No. 1


☒			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2021.


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from to .

Commission file number 001-37713

eBay Inc.

(Exact name of registrant as specified in its charter)

Delaware

77-0430924

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

2025 Hamilton Avenue

San Jose

California

95125

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code:

(408) 376-7108

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol	Name of exchange on which registered
Common stock	EBAY	The Nasdaq Global Select Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

As of June 30, 2021, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was $46,329,747,291 based on the closing sale price as reported on The Nasdaq Global Select Market.

559,842,135 shares of common stock issued and outstanding as of May 2, 2022.

Auditor Name:

PricewaterhouseCoopers LLP

Auditor Location:

San Jose, California

Auditor Firm ID:

238

EXPLANATORY NOTE

This Amendment No. 1 on Form 10-K/A (this “Amendment”) amends Part IV, Item 15 of the Annual Report on Form 10-K for the fiscal year ended December 31, 2021 of eBay Inc. (the “Company”), as filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 24, 2022 (the “Form 10-K”). The purpose of this Amendment is to provide financial statements for Adevinta ASA (“Adevinta”), pursuant to Rule 3-09 of Regulation S-X as of and for the years ended December 31, 2021 and 2020. In accordance with Rule 3-09(b)(1), Adevinta’s financial statements are being filed herewith as Exhibit 99.1 within six months after the end of Adevinta’s fiscal year. In addition, the Company is filing the consent of the independent auditors of Adevinta as Exhibit 23.02 and new certifications by the Company’s Chief Executive Officer and Chief Financial Officer as Exhibits 31.03, 31.04, 32.03 and 32.04, respectively, as required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended.

Except as otherwise expressly noted, this Amendment does not modify or update in any way (i) the consolidated financial position, the results of operations or cash flows of the Company, or (ii) the Form 10-K; nor does it reflect events occurring after the filing of the Form 10-K. Among other things, forward-looking statements made in the Form 10-K have not been revised to reflect events that occurred or facts that became known to us after the filing of the Form 10-K, and such forward-looking statements should be read in their historical context. Furthermore, this Amendment should be read in conjunction with the Form 10-K and any subsequent filings with the SEC.

Unless the context requires otherwise, all references to “we,” “our,” “us” or “eBay” mean eBay Inc., a Delaware corporation, and its consolidated subsidiaries.

PART IV

ITEM 15: EXHIBITS AND FINANCIAL STATEMENT SCHEDULE

a.The following documents are filed as part of this report:

1.Consolidated Financial Statements:

The consolidated financial statements of the Company, as listed in Item 15 of the Form 10-K, are included in Item 15 of the Form 10-K.

2.Financial Statement Schedule:

The financial statement schedule of the Company, as listed in Item 15 of the Form 10-K, is included in Item 15 of the Form 10-K.

The financial statements of Adevinta required by Rule 3-09 of Regulation S-X are provided as Exhibit 99.01 to this Amendment.

3.Exhibits Required by Item 601 of Regulation S-K:

The exhibits listed in the Exhibit Index of the Form 10-K and this Amendment are filed with, or incorporated by reference in, this report.

b.The information required by this Item is set forth in the exhibits listed in the Exhibit Index of the Form 10-K and this Amendment filed with, or incorporated by reference in, this report.

c.Financial Statement Schedule and Separate Financial Statements of Subsidiaries Not Consolidated and Fifty Percent or Less Owned Persons.

Adevinta was deemed a significant equity investee under Rule 3-09 of Regulation S-X for the fiscal year ended December 30, 2021. As such, financial statements of Adevinta are required to be filed by amendment to the Form 10-K within six months of Adevinta’s fiscal year end. Accordingly, Adevinta’s financial statements for its fiscal year ended December 31, 2021 are provided as Exhibit 99.01 to this Amendment.

INDEX TO EXHIBITS

No.

Exhibit Description

Filed or Furnished with
this 10-K/A

Incorporated by Reference

Form

File No.

Date Filed

23.02

Consent of Ernst & Young AS related to Exhibit 99.01.

31.03

Certification of Registrant’s Chief Executive Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002, dated May 10, 2022.

31.04

Certification of Registrant’s Chief Financial Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002, dated May 10, 2022.

32.03

Certification of Registrant’s Chief Executive Officer, as required by Section 906 of the Sarbanes-Oxley Act of 2002, dated May 10, 2022.

32.04

Certification of Registrant’s Chief Financial Officer, as required by Section 906 of the Sarbanes-Oxley Act of 2002, dated May 10, 2022.

99.01

Audited consolidated financial statements of Adevinta ASA as of and for the years ended December 31, 2021 and 2020.

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

Exhibit 23.02

Consent of Independent Auditors

We consent to the incorporation by reference in the Registration Statements on Form S-3 (No.333-236491), Form S-4 (No. 333-117914), and Form S-8 (Nos. 333-64179, 333-87593, 333-41944, 333-58046, 333-97729, 333-100426, 333-107832, 333-117913, 333-127971, 333-129072, 333-136118, 333-140942, 333-143880, 333-149131, 333-149132, 333-151851, 333-155314, 333-159778, 333-165438, 333-168295, 333-171154, 333-174242, 333-175416, 333-175417, 333-176477, 333-176663, 333-178369, 333-181535, 333-181539, 333-192514, 333-193299, 333-195987, 333-203546, 333-213340) of eBay Inc. of our report dated April 28, 2022, relating to the consolidated financial statements of Adevinta ASA as of and for the years ended December 31, 2021 and 2020 appearing in this Annual Report on Form 10-K/A of eBay, Inc.

/s/ Ernst & Young AS

Oslo, Norway

May 10, 2022

Exhibit 31.03

CERTIFICATION OF CHIEF EXECUTIVE OFFICER,

AS REQUIRED BY SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002.

I, Jamie Iannone, certify that:

1.I have reviewed this Amendment No. 1 to the Annual Report on Form 10-K/A of eBay Inc.; and

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.


			/s/ Jamie Iannone
			Jamie Iannone
			Chief Executive Officer
			(Principal Executive Officer)

Date: May 10, 2022

Exhibit 31.04

CERTIFICATION OF CHIEF FINANCIAL OFFICER,

AS REQUIRED BY SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002.

I, Steve Priest, certify that:

1.I have reviewed this Amendment No. 1 to the Annual Report on Form 10-K/A of eBay Inc.; and


			/s/ Steve Priest
			Steve Priest
			Chief Financial Officer
			(Principal Financial Officer)

Date: May 10, 2022

Exhibit 32.03

CERTIFICATION OF CHIEF EXECUTIVE OFFICER,

AS REQUIRED BY SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002.

I, Jamie Iannone, hereby certify pursuant to 18 U.S.C. Section 1350 adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that:

(i) The accompanying Annual Report on Form 10-K/A for the year ended December 31, 2021 fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and

(ii) The information contained in such report fairly presents, in all material respects, the financial condition and results of operations of eBay Inc.


			/s/ Jamie Iannone
			Jamie Iannone
			Chief Executive Officer
			(Principal Executive Officer)

Date: May 10, 2022

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of this report.

Exhibit 32.04

CERTIFICATION OF CHIEF FINANCIAL OFFICER,

AS REQUIRED BY SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002.

I, Steve Priest, hereby certify pursuant to 18 U.S.C. Section 1350 adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that:

(ii) The information contained in such report fairly presents, in all material respects, the financial condition and results of operations of eBay Inc.


			/s/ Steve Priest
			Steve Priest
			Chief Financial Officer
			(Principal Financial Officer)

Date: May 10, 2022

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of this report.

Exhibit 99.01

Adevinta Group

Consolidated financial statements

2021

INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS


Report of Independent Auditors			1
Consolidated Income Statement			2
Consolidated Statement of Comprehensive Income			3
Consolidated Statement of Financial Position			4
Consolidated Statement of Cash Flows			5
Consolidated Statement of Changes in Equity			6
Notes to Consolidated Financial Statements			7

Report of Independent Auditors

To the board of directors of Adevinta ASA

Opinion

We have audited the consolidated financial statements of Adevinta ASA (the Group), which comprise the consolidated statements of financial position as of December 31, 2021 and 2020, and the related consolidated statements of income, comprehensive income, changes in equity and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Group at December 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended in conformity with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and in conformity with IFRS as adopted by the European Union (EU).

Basis for Opinion

We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Group and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in conformity with IFRS as issued by the IASB and in conformity with IFRS as adopted by the EU, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free of material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Auditor’s Responsibility for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free of material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS, we:

a.Exercise professional judgment and maintain professional skepticism throughout the audit.

b.Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

c.Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. Accordingly, no such opinion is expressed.

d.Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.

e.Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Group’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

/s/ Ernst & Young AS

Oslo, Norway

April 28, 2022

CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER


€ million	Note	2021	2020
Operating revenues	6,7	1,139	673

Personnel expenses	9	(368)	(258)
Other operating expenses	8	(415)	(233)

Gross operating profit (loss)	6	356	182
Depreciation and amortisation	16,17,31	(156)	(61)
Share of profit (loss) of joint ventures and associates	5	(8)	16
Impairment loss	15,16	(22)	(43)
Other income and expenses	11	(140)	(39)

Operating profit (loss)	6	29	56
Financial income	12	14	5
Financial expenses	12	(78)	(99)

Profit (loss) before taxes		(35)	(39)
Taxes	13	(19)	(31)

Profit (loss) from continuing operations		(54)	(70)
Profit (loss) from discontinued operations	4	7

Profit (loss) attributable to:
Non-controlling interests	27	6	2
Owners of the parent		(54)	(72)

Earnings per share in €:
Basic	14	(0.06)	(0.10)
Diluted	14	(0.06)	(0.10)

The accompanying notes form an integral part of these consolidated financial statements.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER


€ million	Note	2021	2020
Profit (loss)		(48)	(70)

Remeasurements of defined benefit liabilities	21	0	0
Income tax relating to remeasurements of defined benefit liabilities	13	(0)	(0)
Net gain/(loss) on cash flow hedges	25	56	(144)
Change in fair value of financial instruments		16	(0)
Items not to be reclassified subsequently to profit or loss		72	(145)

Exchange differences on translating foreign operations		22	(102)
Net gain/(loss) on cash flow hedges	25	7	(4)
Items to be reclassified subsequently to profit or loss		29	(106)

Other comprehensive income		101	(251)
Comprehensive income		53	(321)

Comprehensive income attributable to:
Non-controlling interests		5	4
Owners of the parent		48	(325)

The accompanying notes form an integral part of these consolidated financial statements.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS OF 31 DECEMBER


		31 December	31 December
€ million	Note	2021	2020
Intangible assets	15,16	12,790	1,322
Property, plant & equipment	17	35	20
Right-of-use assets	31	82	89
Investments in joint ventures and associates	5	370	369
Deferred tax assets	13	152	2
Other non-current assets	18,24	223	183
Non-current assets		13,653	1,984

Income tax receivable		17	2
Contract assets	7	39	6
Trade receivables and other current assets	18,19,22,24	191	1,200
Cash and cash equivalents	22,24,28	231	131
Assets held for sale	4	115	–
Current assets		593	1,339

Total assets		14,247	3,323

Paid-in equity		9,175	149
Other equity		1,192	1,053
Equity attributable to owners of the parent		10,368	1,203
Non-controlling interests	27	18	19
Equity		10,385	1,222

Deferred tax liabilities	13	896	58
Non-current interest-bearing borrowings	22,23,24,28	2,312	1,266
Lease liabilities, non-current	22,28,31	73	82
Other non-current liabilities	21	18	13
Non-current liabilities		3,299	1,420

Current interest-bearing borrowings	22,23,24,28	152	295
Income tax payable		22	5
Lease liabilities, current	22,28,31	19	18
Contract liabilities	7	67	58
Other current liabilities	21,22,24	275	305
Liability directly associated with the assets held for sale	4	27	–
Current liabilities		563	682

Total equity and liabilities		14,247	3,323

The accompanying notes form an integral part of these consolidated financial statements.

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER


€ million	Note	2021	2020
CASH FLOW FROM OPERATING ACTIVITIES
Profit (loss) before taxes from continuing operations		(35)	(39)
Profit (loss) before taxes from discontinued operations		7	–
Profit (loss) before taxes		(28)	(39)
Depreciation, amortisation and impairment losses	6,15,16,17,31	180	103
Share of loss (profit) of joint ventures and associates	5	8	(16)
Dividends received from joint ventures and associates	28	3	2
Taxes paid		(92)	(42)
Sales losses (gains) non-current assets and other non-cash losses (gains)		33	(6)
Net loss on derivative instruments at fair value through profit or loss		3	79
Accrued share-based payment expenses	10	32	5
Other non-cash items and changes in working capital and provisions (1)		45	18
Net cash flow from operating activities		184	105

CASH FLOW FROM INVESTING ACTIVITIES
Development and purchase of intangible assets and property, plant & equipment		(77)	(43)
Acquisition of subsidiaries, net of cash acquired	28	(2,181)	(7)
Acquisition of debt and equity instruments of joint ventures and associates		–	(287)
Proceeds from sale of intangible assets and property, plant & equipment		0	0
Proceeds from sale of subsidiaries, net of cash sold	28	274	31
Net sale of (investment in) other shares		3	(7)
Net change in other investments		(3)	(3)
Net cash flow from investing activities		(1,983)	(317)

Net cash flow before financing activities		(1,799)	(213)

CASH FLOW FROM FINANCING ACTIVITIES
New interest-bearing loans and borrowings	28	2,440	491
Repayment of interest-bearing loans and borrowings	28	(493)	(205)
Net sale (purchase) of treasury shares		(22)	(2)
IFRS 16 lease payments	28,31	(20)	(12)
Dividends paid to non-controlling interests	27	(8)	–
Net cash flow from financing activities		1,898	272

Effects of exchange rate changes on cash and cash equivalents		1	(0)

Net increase (decrease) in cash and cash equivalents		100	59

Cash and cash equivalents as at 1 January	28	131	72

Cash and cash equivalents as at 31 December	28	231	131

(1)Changes in working capital and provisions consist of changes in trade receivables, and other current receivables and liabilities and accruals.

The accompanying notes form an integral part of these consolidated financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY


€ million	Note	Share capital	Other paid-in equity	Hedging reserve	Retained earnings	Foreign currency transl. reserve	Shareholders' equity	Non-controlling interests	Total


Equity as at 1 January 2020		14	133	–	1,430	(52)	1,524	14	1,539

Profit (loss) for the period		–	–	–	(74)	2	(72)	2	(70)
Other comprehensive income		–	–	(149)	(0)	(104)	(253)	2	(251)
Total comprehensive income		–	–	(149)	(74)	(102)	(325)	4	(321)

Capital increase	22, 26	–	–	–	–	–	–	0	0
Share-based payment	10	–	3	–	–	–	3	–	3
Changes in ownership of subsidiaries that do not result in a loss of control		–	–	–	(0)	–	(0)	0	–
Change in treasury shares		–	(0)	–	–	–	(0)	–	(0)
Total transactions with the owners		–	3	–	(0)	–	3	1	3

Equity as at 31 December 2020		14	136	(149)	1,355	(153)	1,203	19	1,222
Profit (loss) for the period		–	–	–	(64)	10	(54)	6	(48)
Other comprehensive income		–	–	63	26	12	102	(0)	101
Total comprehensive income		–	–	63	(37)	22	48	5	53
Costs of hedging transferred to the carrying amount of goodwill acquired in a business combination	4	–	–	88	–	–	88	–	88
Issue of ordinary shares as consideration for a business combination	22, 26	9,023	–	–	–	–	9,023	–	9,023
Capital increase		–	–	–	–	–	–	0	0
Share-based payment	10	–	20	–	3	–	23	–	23
Changes in ownership of subsidiaries that do not result in a loss of control		–	–	–	(0)	–	(0)	0	–
Dividends paid to non-controlling interest		–	–	–	–	–	–	(8)	(8)
Change in treasury shares		–	(17)	–	–	–	(17)	–	(17)
Total transactions with the owners		9,023	3	88	3	–	9,117	(7)	9,110
Equity as at 31 December 2021		9,036	139	3	1,321	(131)	10,368	18	10,385

The accompanying notes form an integral part of these consolidated financial statements.

Adevinta ASA

Notes to the Consolidated Financial Statements

31 December 2021


GENERAL INFORMATION
Note 1			General information
Note 2			Basis for preparing the consolidated financial statements
Note 3			Significant accounting judgments and major sources of estimation uncertainty

GROUP STRUCTURE
Note 4			Changes in the composition of the Group
Note 5			Investments in joint ventures and associates

INFORMATION ON CONSOLIDATED INCOME STATEMENT ITEMS
Note 6			Operating segments
Note 7			Revenue recognition
Note 8			Other operating expenses
Note 9			Personnel expenses and remuneration
Note 10			Share-based payment
Note 11			Other income and expenses
Note 12			Financial items
Note 13			Income taxes
Note 14			Earnings per share

INFORMATION ON CONSOLIDATED STATEMENT OF FINANCIAL POSITION ITEMS
Note 15			Impairment assessments
Note 16			Intangible assets
Note 17			Property, plant & equipment
Note 18			Other non-current and current assets
Note 19			Trade receivables
Note 20			Financial liabilities related to business combinations and increases in ownership interests
Note 21			Other non-current and current liabilities

CAPITAL MANAGEMENT
Note 22			Financial risk management
Note 23			Interest-bearing borrowings
Note 24			Financial instruments by category
Note 25			Derivatives and hedging activities

OTHER INFORMATION
Note 26			Equity
Note 27			Non-controlling interests
Note 28			Supplemental information to the Consolidated statement of cash flows
Note 29			Transactions with related parties
Note 30			Auditor's remuneration
Note 31			Lease agreements
Note 32			Events after the balance sheet date
Note 33			Ownership

NOTE 1: GENERAL INFORMATION

The Adevinta Group (or “the Group” or “Adevinta) was established 9 April 2019 following demergers of Schibsted Multimedia AS and Schibsted ASA and the consequential transfer of Schibsted’s online classifieds operations outside the Nordics to Adevinta ASA. Adevinta ASA is a public limited company and its offices are located in Grensen 5, Oslo in Norway. The shares of Adevinta ASA are listed on the Oslo Stock Exchange. Schibsted retained a majority interest of 59% in Adevinta ASA until 25 June 2021. Pursuant to the acquisition of eCG, economic interest held by Schibsted decreased to 33% and eBay Inc obtained an economic interest of 44% and neither party has control over the Adevinta Group. In July 2021, an agreement between eBay Inc. and Permira was signed, which committed eBay to sell approximately 125 million shares in Adevinta (10.2% stake) to funds advised by Permira. On 29 July 2021, Permira exercised the 30-day option granted by eBay to purchase an additional 10 million Class A shares at the same price. The transaction between eBay Inc. and Permira was completed on 18 November 2021, and eBay sold 134,743,728 Class A Shares in Adevinta, representing an 11% stake in Adevinta, to Permira. After this transaction, voting rights held by Schibsted, eBay and Permira are 35%, 30% and 12%, respectively (note 14 and 26).

Adevinta is the world’s largest online classifieds company (excluding China) based on revenues generated from online classifieds listings and advertisements, active in many countries around the world. Key markets include France, Spain and Germany. In addition, business was carried out in 2021 in Brazil, Italy, Austria, Ireland, Hungary, Mexico, Chile, Belarus, Morocco, UK, Australia, Belgium, Canada, China, Netherlands, South Africa and USA. Changes in the composition of the Group during the period are described in note 4 and the business areas are described in segment information in note 6. The financial position and performance of Adevinta was particularly affected by the following events and transactions during the reporting period:

•The acquisition of eBay Classifieds Group in June 2021 (note 4), related acquisition and integration costs (note 11), share-based payment transactions (note 10), amortisation expense based on a provisional assessment of their fair value of intangible assets acquired (note 16), hedging the forecasted business combination (note 22 and 25) and required new financing (note 12, 22 and 23).

•The impairment loss of €20 million related to the measurement of the disposal group Shpock at the lower of its carrying amount and fair value less costs to sell until its disposal date and the loss on sale of the disposal group in June 2021 amounting to €33 million (note 4).

•The Covid pandemic (note 32).

The consolidated financial statements including notes for Adevinta ASA for the year 2021 were approved by the Board of Directors on 21 April 2022 and will be proposed to the Annual General Meeting in May 2022.

NOTE 2: BASIS FOR PREPARING THE CONSOLIDATED FINANCIAL STATEMENTS

Compliance with IFRS

The consolidated financial statements of the Group are prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and in conformity with IFRS as adopted by the European Union. The valuation and recognition of the items in the consolidated financial statements have been carried out in accordance with applicable IFRS standards.

New and amended standards adopted by the Group

Adevinta has applied the following standards and amendments for the first time for the annual reporting period commencing 1 January 2021:

•Interest Rate Benchmark Reform – Phase 2: Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16

The amendments complement those issued in 2019 and focus on the effects on financial statements when a company replaces the old interest rate benchmark with an alternative benchmark rate as a result of the reform of inter-bank offered rates (IBOR) and other interest rate benchmarks. The amendments in this final phase relate to:

•changes to contractual cash flows - a company should not have to derecognise or adjust the carrying amount of financial instruments for changes required by the reform, but should instead update the effective interest rate to reflect the change to the alternative benchmark rate;

•hedge accounting - a company should not have to discontinue its hedge accounting solely because it makes changes required by the reform, if the hedge meets other hedge accounting criteria; and

•disclosures - a company is required to disclose information about new risks arising from the reform and how it manages the transition to alternative benchmark rates.

The amendments listed above did not have any impact on the amounts recognised in prior periods, have not had a significant impact in the current period nor are expected to significantly affect the future periods.

New standards and interpretations not yet adopted

The Group’s intention is to adopt the relevant new and amended standards and interpretations as adopted by the IASB when they become effective before the consolidated financial statements are issued. However it is not expected that any current amendments will impact significantly the Adevinta consolidated financial statements in future reporting periods and on foreseeable future transactions.

Basis of preparation

The consolidated financial statements have been prepared based on a historical cost basis, with the exception of:

•financial instruments in the categories “Financial assets and liabilities at fair value through profit or loss or OCI”;

•assets held for sale; and

•plan assets of the defined benefit pension plans.

Assets that no longer justify their value are written down to the recoverable amount, which is the higher of value in use and fair value less selling costs.

An asset or liability is classified as current when it is part of a normal operating cycle, when it is held primarily for trading purposes, when it falls due within 12 months or when it consists of cash or cash equivalents on the date of the Consolidated statement of financial position. Cash and cash equivalents consist of bank deposits and other monetary instruments with a maturity of three months or less. Other items are non-current. A dividend does not become a liability until it has been formally approved by the General Meeting.

Non-current assets as well as groups of non-current assets and liabilities are classified as held for sale if their carrying amount will be recovered through a sale transaction instead of through continued use and a sale is considered highly probable. When these are classified as held for sale they are measured at the lower of their carrying amount or fair value minus sales costs.

All amounts are in € million unless otherwise stated. Due to rounding, numbers presented throughout this document may not add up precisely to the totals provided.

The accounting policies that have been applied as well as significant estimation uncertainties are disclosed in relevant notes to the consolidated financial statements.

Consolidation principles

The consolidated financial statements include the parent Adevinta ASA and all subsidiaries, presented as a single economic entity. All the entities have applied consistent principles. Intercompany transactions, balances and unrealized gains on transactions between group companies have been eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset.

Subsidiaries are all entities controlled, directly or indirectly, by Adevinta ASA. The Group controls an entity when it is exposed to, or has rights to, variable returns from the involvement with the entity and has the ability to affect those returns through power over the entity. Power over an entity exists when the Group has existing rights that give the current ability to direct the activities that significantly affect the entity's returns.

Generally, there is a presumption that a majority of voting rights results in control. The Group considers all relevant facts and circumstances in assessing whether control exists, including contractual arrangements and potential voting rights to the extent that those are substantive.

Subsidiaries are included in the consolidated financial statements from the date Adevinta ASA effectively obtains control of the subsidiary (acquisition date) and until the date Adevinta ASA ceases to control the subsidiary.

Non-controlling interests is the equity in a subsidiary not attributable, directly or indirectly, to Adevinta ASA. Non-controlling interests are presented in the Consolidated statement of financial position within equity, separately from the equity of the owners of the parent, except when put options are granted to holders of non-controlling interests, in which case the related accumulated non-controlling interest is derecognised.

Profit (loss) and comprehensive income attributable to non-controlling interests are disclosed as allocations for the period of profit (loss) and comprehensive income attributable to non-controlling interests and owners of the parent, respectively.

Associates are all entities over which the Group has significant influence but in which it does not have control or joint control. Investments in associates are accounted for using the equity method of accounting (note 5), after initially being recognised at cost in the Consolidated statement of financial position.

Joint arrangements are classified as either joint operations or joint ventures. The classification depends on the contractual rights and obligations of each investor, rather than the legal structure of the joint arrangement. The Group has joint ventures only. Interests in joint ventures are accounted for using the equity method (note 5), after initially being recognised at cost in the Consolidated statement of financial position.

Foreign currency translation

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The consolidated financial statements are presented in euros (€), which is Adevinta ASA's functional and presentation currency.

Foreign currency transactions are translated into the entity's functional currency on initial recognition by using the spot exchange rate at the date of the transaction. At the reporting date, assets and liabilities are translated from foreign currency to the entity’s functional currency by:

–translating monetary items using the exchange rate at the reporting date

–translating non-monetary items that are measured in terms of historical cost in a foreign currency using the exchange rate at the transaction date

–translating non-monetary items that are measured at fair value in a foreign currency using the exchange rate at the date when the fair value was determined

Exchange differences arising on the settlement of, or on translating monetary items not designated as, hedging instruments, are recognised in profit or loss in the period in which they arise. When a gain or loss on a non-monetary item is recognised in other comprehensive income, any exchange component of that gain or loss is also recognised in other comprehensive income. When a gain or loss on a non-monetary item is recognised in profit or loss, any exchange component of that gain or loss is also recognised in profit or loss.

Upon incorporation of a foreign operation into the consolidated financial statements by consolidation or the equity method, the results and financial position are translated from the functional currency of the foreign operation into € (the presentation currency) by using the step-by-step method of consolidation. Assets and liabilities are translated at the closing rate at the reporting date and income and expenses are translated monthly at the average exchange rates for the month and accumulated. Resulting exchange differences are recognised in other comprehensive income until the disposal of the foreign operation.

Exchange rates are quoted from Norges Bank (norges-bank.no), which is Norway’s central bank.

Goodwill and fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition of a foreign operation are treated as assets and liabilities of that foreign operation. They are therefore expressed in the functional currency of the foreign operation and translated at the closing rate at the reporting date.

NOTE 3: SIGNIFICANT ACCOUNTING JUDGMENTS AND MAJOR SOURCES OF ESTIMATION UNCERTAINTY

The preparation of the Group’s consolidated financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, the accompanying disclosures and the disclosure of contingent liabilities.

Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. Management also needs to exercise judgement in applying the Group’s accounting policies. The most important areas where judgments and estimates are having an impact are listed below. Detailed information of these estimates and judgements is included in the relevant notes.

The duration and extent of the pandemic and related financial, social and public health impacts of the Covid pandemic remain uncertain. Management has based its current estimates of future cash flows taking into account that the businesses have recovered from Covid in 2021 and the discount rates are based on expected volatility, risk premiums and interest rates at levels indicative of the current environment. Management continues monitoring Covid developments.

Significant estimates and judgements:

•Identification of the acquirer of eCG (note 4)

•Fair value of assets acquired and liabilities assumed in a business combination (note 4)

•Existence of significant influence over an investee (note 5)

•Recognition of contracted listing fees and premium products according to normal pattern of views (note 7)

•Principal / agent assessment for transactional services provided (note 7)

•Fair value of share-based awards (note 10)

•Classification of other income and expense as not being part of activities in the normal course of business (note 11)

•Recognition of deferred tax assets for tax losses carried forward (note 13)

•Calculation of value in use in testing for impairment of goodwill and other intangible assets (note 15)

•Capitalisation of development costs (note 16)

•Fair value of contingent consideration and liabilities related to non-controlling interests’ put options (note 20)

•Calculation of present value of defined benefit pension obligations (note 21)

•Assessment of contingent liabilities (note 21)

•Liabilities measured at fair value (note 24)

•Determination of lease term and estimating the incremental borrowing rate (note 31)

NOTE 4: CHANGES IN THE COMPOSITION OF THE GROUP

PRINCIPLE

Business combinations

The acquisition method is used to account for all business combinations that do not involve entities under common control where Adevinta ASA or its subsidiary is the acquirer, meaning the entity that obtains control over another entity or business. When a subsidiary or business is acquired, a purchase price allocation is carried out. Identifiable assets acquired and liabilities and contingent liabilities assumed are, except for limited exceptions, measured at fair value at the acquisition date. Any non-controlling interest in the acquiree is measured, for each individual acquisition, either at fair value or at the proportionate share of the acquiree's identifiable net assets. The residual value in the acquisition is goodwill. Acquisition-related costs are expensed as incurred.

Contingent consideration is recognised as part of the consideration transferred in exchange for the acquiree. Subsequent changes in the fair value of the contingent consideration deemed to be a liability are recognised in profit or loss.

In business combinations that are achieved in stages, the previously held equity interest is remeasured to fair value at the acquisition date. Any gains or losses arising from such remeasurement are recognised in profit or loss.

Changes in ownership interests in subsidiaries that do not result in a loss of control

Transactions with non-controlling interests that do not result in a loss of control are recognised in equity. Any change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-controlling interests to reflect their relative interest in the subsidiary. Any difference between the amount of the adjustment to non-controlling interests and any consideration paid or received is recognised within equity attributable to owners of Adevinta ASA.

When put options are granted by Adevinta to holders of non-controlling interests, Adevinta determines and allocates profit (loss), other comprehensive income and dividends paid to such non-controlling interests. Accumulated non-controlling interests are derecognised as if the non-controlling interest was acquired at the reporting date and a financial liability reflecting the obligation to acquire the non-controlling interest is recognised. The net amount recognised or derecognised is accounted for as an equity transaction. In the Consolidated statement of changes in equity, such amounts are included in the line item “Changes in ownership of subsidiaries that do not result in a loss of control”.

Non-current assets (or disposal groups) held for sale and discontinued operations

Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use and a sale is considered highly probable. These assets, including subsidiaries acquired exclusively with a view to resale, are measured at the lower of their carrying amount and fair value less costs to sell, except for deferred tax assets, assets arising from employee benefits and financial assets which are specifically exempt from this requirement.

An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal group) to fair value less costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell the asset (or disposal group), but not in excess of any cumulative impairment loss previously recognised. A gain or loss not previously recognised by the date of the sale of the non-current asset (or disposal group) is recognised at the date of derecognition.

Non-current assets (including those that are part of a disposal group) are not depreciated or amortised while they are classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified as held for sale continue to be recognised.

Non-current assets classified as held for sale and the assets of a disposal group classified as held for sale are presented separately from the other assets in the Consolidated statement of financial position. The liabilities of a disposal group classified as held for sale are presented separately from other liabilities in the Consolidated statement of financial position.

A discontinued operation is a component of the Group that has been disposed of or is classified as held for sale and that represents a separate major line of business or geographical area of operations, is part of a single coordinated plan to dispose of such a line of business or area of operation, or is a subsidiary acquired exclusively with a view to resale. The results of discontinued operations are presented separately in the Consolidated income statement.

Loss of control

The assets and liabilities of the subsidiary and the carrying amount of any non-controlling interests are derecognised when Adevinta loses control of a subsidiary. Any consideration received and any investment retained in the former subsidiary is recognised at their fair values. The difference between amounts recognised and derecognised is recognised in profit or loss. Amounts recognised in other comprehensive income related to the subsidiary are reclassified to profit or loss or transferred to equity similarly as if the parent had disposed of the assets and liabilities directly. Amounts reclassified to profit or loss (including accumulated translation differences) are included in gain or loss on loss of control of subsidiary in profit or loss.

Critical judgement

Adevinta is the acquiring party in eBay Classifieds Group business combination as it is the formal acquiring party; part of the consideration was paid by Adevinta in cash; management from Adevinta continued their positions after transaction and Schibsted is the largest shareholder.

BUSINESS COMBINATIONS

Adevinta invested €2,177 million in 2021 (€0 million in 2020) to acquire businesses (business combinations). The amount comprises the net cash consideration transferred reduced by cash and cash equivalents of the acquirees. Additionally, Adevinta paid €2 million of contingent consideration related to the prior year’s business combinations. In 2020, Adevinta paid €7 million of deferred consideration related to the prior year's business combinations.

On 25 June 2021, Adevinta completed the acquisition of eBay Classifieds Group (eCG), a leading digital classifieds brand across 13 countries, including Germany, Denmark (subsequently sold immediately after closing, see below), Canada, the Netherlands, Belgium, the United Kingdom and Australia. Headquartered in Amsterdam, the Netherlands, eBay Classifieds consists of multiple platforms offering online classifieds listings across motors, real estate and general classifieds. Germany, the Netherlands and Canada are eBay Classifieds’ largest markets. eBay Classifieds’ platforms operate under a number of brands, most significantly Mobile.de, eBay Kleinanzeigen, Marktplaats, Kijiji and Gumtree.

Following the closing of the transaction, Adevinta is the world’s largest online classifieds company (excluding China) based on revenues generated from online classifieds listings and advertisements. The Group connects buyers seeking goods or services with a large base of sellers.

Adevinta operates generalist (which cover consumer goods, often alongside motor, real estate and jobs) as well as vertical (which focus on one of the key monetizable categories: motors, real estate and jobs and typically rely heavily on professional sellers paying listing fees as an important revenue stream) online classifieds sites with leading market positions in 15 countries around the world, based on number of visits, that are accessible via desktop, mobile and dedicated apps. Adevinta and eBay Classifieds are highly complementary businesses and Adevinta expects to benefit from synergies, including across vertical and generalist online classifieds sites.

The table below summarises the consideration transferred:


			€ million
Consideration:
Cash			2,153
Adevinta’ s shares issued			9,023
Cash flow hedge reserve released			88
Consideration transferred			11,264

The consideration transferred includes cash consideration of USD 2,500 million, 539,994,479 Adevinta shares, a closing cash adjustment of USD 54 million and a post-closing cash adjustment of USD 16 million.

The total cash consideration is equal to the amount of USD 2,554 million translated on 24 June 2021 closing rate of USD/EUR 1.1936 and USD 16 million translated on 24 November 2021 closing rate of USD/EUR 1.2071.

The fair value of the 539,994,479 shares issued as part of the consideration transferred (€9,023 million) was based on Adevinta’s Norwegian Krone closing share price on 24 June 2021 of NOK170 per share translated into Euro at 24 June 2021 closing rate of NOK/EUR 10.174. Issue costs of €0 million which were directly attributable to the issue of the shares were netted against the deemed proceeds.

On 24 June 2021 the valuation of the deal-contingent forwards entered in respect of the cash consideration for the forecasted acquisition of eCG (note 25) with an aggregate notional amount of USD 2,500 million was negative by €95 million of which €88 million was recognised in equity as a hedge reserve including a gain of €56 million recognised in 2021. When the hedging instruments were settled immediately prior to the acquisition, the hedge reserve accumulated in equity was included as part of the consideration transferred.

The table below summarises the amounts recognised for assets acquired and liabilities assumed:


Amounts for assets and liabilities recognized:			€ million
Cash			66
Trade and other receivables			108
Corporate income tax receivable			7
PPE and right of use assets			35
Intangible assets: trademarks			3,351
Intangible assets: customer contracts			497
Intangible assets: technology			276
Intangible assets: others			4
Long-term investments			0
Deferred tax assets			148
Assets classified as held for sale			333
Current liabilities			(154)
Deferred tax liabilities			(897)
Other non-current liabilities			(11)
Liabilities directly associated with assets classified as held for sale			(25)
Total identifiable net assets acquired			3,738
Goodwill			7,526
Consideration transferred			11,264

The fair value of the acquired receivables is €108 million, of which €49 million are trade receivables. There is no material difference between the gross contractual amount receivable and the fair value of the receivables. The assumed lease liabilities were measured using the present value of the remaining lease payments at the date of acquisition. The acquired right-of-use assets were measured at an amount equal to the lease liabilities. In calculating the present value of lease payments, Adevinta used its incremental borrowing rate at acquisition date because the interest rate implicit in the leases were not readily determinable.

The goodwill recognised connected with the acquisition of eBay Classifieds Group in 2021 is attributable to the workforce, future customer growth and synergies, including across vertical and generalist online classifieds sites. The goodwill recognised is not expected to be deductible for income tax purposes.

In 2021 eCG contributed €384 million to operating revenues and contributed positively to consolidated profit (loss) from continuing operations by €45 million. If the acquisition date of the business combination was at 1 January, the operating revenues and profit (loss) for continuing operations of Adevinta would have been €1,521 million and €(47) million, respectively in 2021.

In December 2021, Adevinta completed the acquisition of Pixie Pixel, S.L., a Spanish real estate valuation tool which will integrate with the real estate vertical Fotocasa, part of Adevinta Spain. The acquisition follows years of collaboration between Fotocasa and PixiePixel in building DataVenues, a cross-platform tool for property valuation. The consideration transferred for the acquisition was €5 million, €2 million were paid in cash at acquisition date and €3 million correspond to contingent consideration (see contingent consideration section). The provisional amount of total identifiable assets acquired was €0 million. The provisional amount of goodwill was €5 million. The goodwill recognised connected with the acquisition of Pixie Pixel, S.L. in 2021 is mainly attributable to the value of expected synergies with Adevinta Spain, SLU (Fotocasa) and to the workforce and know-how of the company acquired. The goodwill recognised is not expected to be deductible for income tax purposes.

The business combinations carried out in 2021 are part of Adevinta’s growth strategy and the businesses acquired were identified as being a good strategic fit with existing operations within Adevinta.

Consideration transferred – cash outflow

Cash outflow to acquire eBay Classifieds Group, net of cash acquired, is as follows:


			€ million
Cash consideration			2,153
Settlement of deal contingent forward contracts			88
Less balances acquired:
Cash			66
Net cash outflow – investing activities			2,175

Per Adevinta instructions, part of the consideration transferred for eBay Classifieds Group was paid to the seller by the banks providing new financing. The banks were acting as agents of Adevinta and the payments were assessed to be cash payments made by Adevinta.

In addition, acquisition-related costs that were not directly attributable to the issue of shares are included in net cash flow operating activities in the Consolidated statement of cash flows.

Cash outflow to acquire Pixie Pixel, S.L., net of cash acquired, amounted to €2 million.

In January 2020, Adevinta completed the acquisition of Pilgo SAS, which is an online marketplace for hotel rooms. In February 2020, Adevinta completed the acquisition of Jobisjob SLU, which is a digital company related to the job market.

The subsidiaries acquired in 2021, all the entities of eCG and Pixie Pixel, S.L. are included in the Mobile.de, European Markets and International Markets operating segments. The subsidiaries acquired in 2020, Pilgo SAS and Jobisjob SLU are included in the European Markets and France operating segments respectively.

Acquisition-related costs of €49 million (€32 million in 2020) related to business combinations are recognised in profit or loss in line item “Other income and expenses” (note 11).

Contingent consideration

A contingent consideration was agreed as part of the purchase agreement with the previous owners of Pixie Pixel, S.L. The contingent consideration is limited to two cash payments to be made in 2023 and 2024. Each payment is capped at €2 million and €1 million respectively and will be calculated on the achievement of certain targets for each period. As at the acquisition date, the fair value of the contingent consideration is estimated to be €3 million.

A contingent consideration was agreed as part of the purchase agreement with the previous owners of Locasun SARL. The contingent consideration was limited to two cash payments to be made at the end of years 2020 and 2021. Each payment was capped at €2 million and was to be calculated on the achievement of certain EBITDA targets for each period. As at the acquisition date, the fair value of the contingent consideration was estimated to be €4 million. No payment was made in 2020. The fair value of the contingent consideration as at 31 December 2020 was €1 million. Payment made in 2021 amounted to €1 million (note 20).

DISPOSAL OF SUBSIDIARIES

In February 2021, Adevinta sold its subsidiary Yapo (Chile) to Frontier Digital Ventures (FDV), a company specializing in online marketplaces in emerging markets. The disposal was in line with Adevinta’s portfolio optimization strategy. The sale resulted in a loss of €11 million recognised in other income and expenses (note 11), of which €10 million is reclassification of foreign currency translation reserve, with no impact on income tax. The carrying amount of assets and liabilities as at the date of sale (24 February 2021) were €20 million and €3 million respectively, of which €18 million was intangible assets and €1 million cash.

In June 2021, Adevinta sold Shpock (Austria) to Russmedia Equity Partners. The disposal was related to remedies proposed by Adevinta and eBay to address the Austrian Federal Competition Authorities (the

“FCA”) concern that the Adevinta’s acquisition of eCG could potentially lessen competition in the Austrian market between eBay.at and willhaben, Adevinta’s joint venture business in Austria.

From March 2021, the carrying amount of Shpock was expected to be recovered principally through a sales transaction, Shpock was available for immediate sale in its present condition and its sale was highly probable. Therefore, from March 2021 until its disposal date, the disposal group was classified as held for sale and measured at the lower of its carrying amount and fair value less costs to sell. In relation to measurement, an impairment loss was recognised amounting to €(20) million, which was allocated to goodwill (€2 million) and other intangible assets (€18 million). Related deferred tax liabilities were derecognised amounting to €(5) million. The sale resulted in a loss of €33 million, with no impact on income tax, due to the restructuring required to execute the terms of the sales agreement, recognised in other income and expenses (note 11). The carrying amount of assets and liabilities as at the date of sale (2 June 2021) were €38 million and €5 million respectively, of which €9 million was intangible assets and €27 million cash.

In June 2021, immediately after the acquisition of eCG, Adevinta sold its subsidiary eBay Denmark to a subsidiary of Schibsted for a consideration of €295 million, corresponding to the carrying amount of the net assets sold and hence no gain or loss or income tax were recognized related to the sale.

As at the date of sale, the fair value less costs of disposal of eBay Denmark was €295 million, the fair value of assets and liabilities were €301 million and €6 million, respectively.

In November 2021, Adevinta sold its subsidiaries Gumtree UK and Motors.co.uk to Classifieds Group Limited. The disposal was related to a previous agreement with the UK’s Competition and Market Authority (“CMA”) for approval of Adevinta’s acquisition of eCG. Gumtree UK and Motors.co.uk were classified as subsidiaries acquired exclusively with a view to resale upon acquisition on 25 June 2021. These businesses’ net assets were classified as held for sale and measured at estimated fair value less costs to sell and their operations are presented as discontinued operations.

The disposal of Gumtree UK and Motors.co.uk. resulted in a gain of €2 million, with no impact on income tax. The gain has been presented within the profit from discontinued operation in 2021.

The carrying amount of assets and liabilities as at the date of sale (30 November 2021) were €34 million and €29 million respectively.

Following the decision to divest the businesses in Australia and South Africa in November 2021, the carrying amount of Carsguide Autotrader Media Solutions Australia PTY Ltd, Gumtree Australia PTY Ltd and Gumtree South Africa (PTY) Ltd is expected to be recovered principally through a sales transaction. The businesses in Australia and South Africa are available for immediate sale in its present condition and its sale is highly probable. Therefore, these subsidiaries have been classified as held for sale as at 31 December 2021 and are measured at the lower of its carrying amount and fair value less costs to sell. Furthermore, these operations constitute major geographical locations and are therefore classified as discontinued operations. The carrying amount of goodwill included into this disposal group was €22 million.

The financial performance and cash flow information related to the discontinued operations in 2021 are disclosed below:


			€ million
Revenue			71
Operating expenses			(59)
Gross operating profit / (loss)			12
Operating profit /(loss)			10
Profit / (loss) after income tax			10
Gain / (loss) on sale of the subsidiary after income tax and fair value measurement adjustments			(3)
Profit / (loss) from discontinued operation			7
Exchange differences on translation			0


			€
Basic			0.00
Diluted			0.00


			€ million
Net cash flow from operating activities			7
Net cash flow from investing activities (includes an inflow of €4 million and a cash outflow of €(12) million both related to the sale of Gumtree UK and Motors.co.uk)			(8)
Net cash flow from financing activities			(1)
Net cash (outflow) / inflow			(2)

In November 2020, Adevinta sold its subsidiaries, Avito (Morocco), Tayara (Tunisia) and Fincaraíz (Colombia) to Frontier Digital Ventures (FDV), a company specializing in online marketplaces in emerging markets. All three subsidiaries were disposed of as a group in a single transaction. The disposal was aligned to Adevinta’s portfolio optimisation strategy. The disposal group did not represent a separate major line of business, thus did not qualify as discontinued operations. The sale resulted in a gain before tax of €4 million recognised in other income and expenses (note 11), of which €(2) million loss was a reclassification of foreign currency translation reserve, with an impact on income tax of €(5) million. The carrying amount of assets and liabilities as at the date of sale (6 November 2020) were €35 million and €8 million respectively, of which €25€ million was intangible assets, €6 million was trade and other current receivables, €2m was other assets and €2 million cash.

OTHER CHANGES IN THE COMPOSITION OF ADEVINTA

In 2021, SAS SNEEP paid €1 million related to prior year’s business combinations (note 20) and LBC France, SASU has paid €1 million exercising the options agreed as part of the purchase agreement with the previous owners of PayCar SAS (note 20). The latter payment resulted in the participation in PayCar SAS increasing from 69.8% in 2020 to 100.0% in 2021.

In March 2020, Adevinta's OLX Brazil joint venture agreed to acquire Grupo Zap, a leading online classifieds site for real estate operating in Brazil, for approximately R$3 billion. In the consolidated financial statements, this investment was accounted for using the equity method. At signing, Adevinta

entered into a deal-contingent derivatives to fix Adevinta’s funding commitment in relation to the transaction in € and eliminate the currency risk. The acquisition was closed on 30 October 2020.

At settlement, the derivatives were derecognised. The change in the fair value of the derivatives of €(67) million was recognised in financial expenses (note 12 and 25) in profit or loss.

The acquisition of Grupo Zap was partially financed through a capital increase in the joint venture in Brazil amounting to €77 million (note 5) and a loan to the joint venture amounting to BRL949 million (€143 million at the issue date) (note 18 and 29).

NOTE 5: INVESTMENTS IN JOINT VENTURES AND ASSOCIATES

Principle

A joint arrangement is an arrangement where two or more parties have joint control. Joint control is the contractually agreed sharing of control of an arrangement and exists when decisions about the relevant activities require the unanimous consent of the parties sharing control. Investments in joint arrangements are classified as joint ventures if they are structured through separate vehicles and the parties have rights to the net assets of the arrangements.

An associate is an entity over which Adevinta, directly or indirectly through subsidiaries, has significant influence. Significant influence is normally presumed to exist when Adevinta controls 20% or more of the voting power of the investee. Significant influence can also be demonstrated when the Group is entitled to be a Board member, even if ownership interest is below 20%.

Interests in joint ventures and associates are accounted for using the equity method.

Equity method

Under the equity method of accounting, the investments are initially recognised at cost and adjusted thereafter to recognise Adevinta’s share of the post-acquisition profits or losses. Adevinta's share of the investee's profit or loss is recognised in profit or loss and the share of changes in other comprehensive income is recognised in other comprehensive income with a corresponding adjustment to the carrying amount of the investment. Dividends received reduce the carrying amount of the investment.

When Adevinta’s share of losses equals or exceeds its interest in the entity, including any other unsecured long-term receivables, Adevinta does not recognise further losses, unless it has incurred obligations or made payments on behalf of the other entity.

The carrying amount of equity-accounted investments is tested for impairment in accordance with the policy described in note 15.

Significant judgment

The Group is guaranteed one seat on the board of Younited SA and participates in all significant financial and operating decisions. The Group has therefore determined that it has significant influence over this entity, even though it only holds 8.4% of the voting rights.

Changes in ownership

The use of the equity method is discontinued from the date an investment ceases to be a joint venture or an associate. Any retained interest in the entity is remeasured to its fair value, with the changes in carrying amount recognised in profit or loss. This fair value becomes the initial carrying amount for the purposes of subsequently accounting for the retained interest as a financial asset. The difference between the total of the fair value of this retained interest and any proceeds from disposing a partial interest in a joint venture or an associate, and the carrying amount of the investment, is recognised in

profit or loss. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.

If Adevinta's ownership interest in a joint venture or an associate is reduced, but joint control or significant influence is retained, a gain or loss from the partial disposal is recognised in profit or loss. The retained interest is not remeasured. Only a proportionate share of the amounts previously recognised in other comprehensive income are reclassified to profit or loss where appropriate.


	2021			2020
Development in net carrying amount	Joint ventures	Associates	Total	Joint ventures	Associates	Total
As at 1 January	342	27	369	369	11	380
Additions (note 4)	–	–	–	77	–	77
Share of profit (loss)	(6)	(2)	(8)	1	15	16
Gain	–	7	7	–	2	2
Dividends received and capital repayments	(2)	(1)	(3)	(2)	(0)	(2)
Other comprehensive income attributable to owners of the parent	–	1	1	–	–	–
Translation differences	3	1	5	(103)	(0)	(103)
As at 31 December	337	33	370	342	27	369
Of which presented in Investments in joint ventures and associates	337	33	370	342	27	369

For more details on acquisitions and divestments of joint ventures and associates, see note 4.

In 2021, a gain of dilution on Younited of €7 million has been recognised in Other income and expenses. Interest held in Younited has decreased from 10.5% in 2020 to 8.4% in 2021. In 2020, a gain on dilution on Younited of €2 million was recognised in Other income and expenses. Interest held in Younited decreased from 10.9% in 2019 to 10.5% in 2020.

In 2020 share of profit (loss) of joint ventures and associates included a gain of €17 million in relation to the disposal by 703 Search BV of the investment in Silver Indonesia JVCO BV that was swapped for cash and a 6% stake in the online marketplace Carousell operating in Asia.

The carrying amount of investments in joint ventures and associates comprises the following investments:


		2021			2020
	Country of incorporation	Interest held	Joint ventures	Associates	Interest held	Joint ventures	Associates

Silver Brazil JVCO BV	Netherlands	50.0%	329	–	50.0%	335	–
willhaben internet service GmbH	Austria	50.0%	8	–	50.0%	7	–
Younited SA	France	8.4%	–	16	10.5%	–	11
703 Search BV	Netherlands	31.5%	–	17	31.5%	–	16
Other			–	0		–	0
Carrying amount as at 31 December			337	33		342	27

Description of the business of the joint ventures and associates:

Silver Brazil JVCO BV

Operates online classified sites in Brazil (olx.com.br, Anapro.com.br, suahouse.com, datazap.com.br, fipezap.com.br, zap.com.br, vivareal.com.br, conectaimobi.com.br, geoimóvel.com.br and infoprop.com.br)

willhaben internet service GmbH

Operates online classified sites in Austria (willhaben.at, car4you.at and autopro24.at)

Younited SA

Operates peer-to-peer lending marketplaces in France, Italy and Spain (younited-credit.com, it.younited-credit.com and es.younited-credit.com)

703 Search BV

Operates as a holding company for the equity investment in Carousell and does not carry out any trading activities.

The following table sets forth summarised financial information for Silver Brazil, the only material joint venture of the Group, as at 31 December:


	2021	2020

Income statement and statement of comprehensive income:
Operating revenues	120	69
Depreciation and amortisation	(13)	(3)
Interest income	1	0
Interest expense	(19)	(3)
Taxes	4	(1)
Profit (loss)	(18)	(2)
Profit (loss) attributable to owners of the parent	(18)	(2)
Total comprehensive income attributable to owners of the parent	(18)	(2)
Share of profit (loss)	(9)	(1)
Share of other comprehensive income	–	–
Share of total comprehensive income	(9)	(1)

Statement of financial position:
Goodwill	349	411
Other non-current assets	151	105
Other current assets	22	12
Cash and cash equivalents	28	21
Non-current financial liabilities (excluding trade and other payables)	(332)	(314)
Other non-current liabilities	(28)	(38)
Other current liabilities	(33)	(28)
Net assets/(liabilities)	158	170
Share of net assets/(liabilities)	79	85
Goodwill	250	250
Carrying amount as at 31 December	329	335

The table above shows figures on a 100% basis. Variances in the income statement from 2021 to 2020 are mainly due to the Grupo Zap acquisition in October 2020.

NOTE 6: OPERATING SEGMENTS

Principles

The operating segments correspond to the management structure and the internal reporting to the Group’s chief operating decision maker, defined as the CEO. The operating segments reflect an allocation based on geographical location.

After the eBay Classifieds Group acquisition, based on the new internal reporting structure, Adevinta identified France, Mobile.de, European Markets and International Markets as reportable operating segments.

•France comprises primarily leboncoin, MB Diffusion, Avendrealouer, Videdressing, Locasun, PayCar, L’Argus and Pilgo.

•Mobile.de comprises Mobile.de in Germany.

•European Markets comprises primarily eBay Kleinanzeigen in Germany, Markplaats, 2ememain and 2dehands in Benelux, InfoJobs, Coches, Motos, Fotocasa, Habitaclia and Milanuncios in Spain, Subito, Infojobs, Automobile and Kijiji in Italy, Daft, Done Deal and Adverts in Ireland, Hasznaltauto, Jofogas and Autonavigator in Hungary and Kufar in Belarus. Furthermore, Adevinta’s share of the net profit (loss) of willhaben in Austria is included in operating profit (loss). While CEO receives separate reports for each region, the markets have been aggregated into one reportable segment as they have similar risk free interest rates and similar economic risks.

•International Markets comprises Segundamano and Vivanuncios in Mexico, Kijiji and Kijijiautos in Canada, Infojobs Brazil in Brazil and Gumtree in other countries (Poland, Ireland, Singapore and Argentina). Furthermore, Adevinta’s share of the net profit (loss) of Silver Brazil joint venture (including OLX, Anapro and Grupo Zap) is included in operating profit (loss).

Disposals comprises Adevinta’s divestments in Corotos in Dominican Republic (sold in 2020), Tayara in Tunisia (sold in 2020), Avito in Morocco (sold in 2020), Fincaraiz in Colombia (sold in 2020), Yapo in Chile (sold in 2021) and Shpock in Austria, Germany and United Kingdom (sold in 2021).

Other/Headquarters comprises Adevinta’s shareholder and central functions including central product and technology development.

Eliminations comprise reconciling items related to intersegment sales. Transactions between operating segments are conducted on normal commercial terms.

In the operating segment information presented, gross operating profit (loss) is used as a measure of operating segment profit (loss). For internal control and monitoring, both gross operating profit (loss) and operating profit (loss) are used as measures of operating segment profit (loss).

See the explanation in note 7 regarding disaggregation of revenues.

Operating revenues and profit (loss) by operating segments


2021 € million	France	Mobile.de	European Markets	Interna-tional Markets	Disposals	Other / Head-quarters	Eliminations	Total
Operating revenues from external customers	451	151	458	67	3	9	–	1,139
Operating revenues from other segments	2	(11)	13	0	–	(0)	(4)	–
Operating revenues	453	141	470	67	3	9	(4)	1,139
Gross operating profit (loss)	214	79	171	21	(5)	(122)	–	356
Depreciation and amortisation	(27)	(39)	(63)	(10)	(1)	(18)	–	(156)
Share of profit (loss) of joint ventures and associates	(3)	–	3	(9)	–	(0)	–	(8)
Impairment loss	–	(2)	(0)	–	(20)	–	–	(22)
Other income and expenses	8	0	(5)	(0)	(47)	(96)	–	(140)
Operating profit (loss)	192	38	106	2	(73)	(236)	–	29

For information regarding “Other income and expenses”, see note 11.


2020 € million	France	Mobile.de	European Markets	Interna-tional Markets	Disposals	Other / Head-quarters	Eliminations	Total
Operating revenues from external customers	392	–	250	7	19	5	–	673
Operating revenues from other segments	1	–	0	0	0	4	(5)	–
Operating revenues	393	–	250	8	19	9	(5)	673
Gross operating profit (loss)	191	–	69	(2)	(15)	(61)	–	182
Depreciation and amortisation	(24)	–	(16)	(2)	(2)	(16)	–	(61)
Share of profit (loss) of joint ventures and associates	(2)	–	3	(1)	–	17	–	16
Impairment loss	0	–	(0)	(0)	(42)	(0)	–	(43)
Other income and expenses	2	–	(1)	(2)	3	(41)	–	(39)
Operating profit (loss)	166	–	54	(7)	(56)	(101)	–	56

For information regarding “Other income and expenses”, see note 11.

Operating revenues and non-current assets by geographical areas

In presenting geographical information, attribution of operating revenues is based on the location of the companies. There are no significant differences between the attribution of operating revenues based on the location of companies and an attribution based on the location of customers. Operating revenues presented in the table below are revenues from external customers. Non-current assets are attributed based on the geographical location of the assets.


€ million	2021	2020
Operating revenues
France	451	392
Germany	246	–
Spain	192	165
Other Europe	182	96
Other countries	67	20
Total	1,139	673

Non-current assets
France	1,238	726
Germany	8,313	–
Spain	664	519
Other Europe	1,400	188
Other countries	1,674	376
Total	13,289	1,809

The non-current assets comprise assets, excluding deferred tax assets and financial instruments, expected to be recovered more than twelve months after the reporting period. Other countries consist primarily of Adevinta's businesses in Canada and Latin America.

NOTE 7: REVENUE RECOGNITION

Principles

Adevinta recognises revenue to depict the transfer of promised goods or services to customers that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

Revenue is measured at the transaction price agreed under the contract. The non-cash consideration is measured at the fair value of the goods or services received. If the fair value cannot be reasonably estimated, the non-cash consideration is measured indirectly by reference to the stand-alone selling price of the services provided.

Adevinta has applied the following principles for the timing of revenue recognition for the different categories of products and services:

Advertising

Advertising revenues are from sales of advertisement space on online sites. Advertising revenues are recognised as the ads are displayed over the specified period of time.

Classifieds

Listing fees in contracts entitling the customer to have an ad displayed for a defined maximum period of time are recognised over that period, reflecting the normal pattern of views of such ads. Revenue from premium products that are active for a defined maximum period is recognised over that period. Revenue from other premium products benefiting the customer in a pattern similar to that of a listing fee is recognised over the applicable period similar to listing fees.

Transactional services

The transactional model offers payment facilitation and delivery services. Adevinta engages third parties to provide these services and assesses whether it is acting as an agent or a principal based on the terms of each arrangement with the service providers. Where Adevinta does not have control over the service before it is being transferred to the customer, Adevinta is acting as an agent and recognises revenue at the net amount that is retained for these arrangements. Conversely, where Adevinta has control over the service before it is being transferred to the customer, Adevinta is acting as a principal and recognises revenue at the gross amount.

Revenue is recognised at a point in time (i.e., upon receipt of the customer of the delivery or upon the completion of the payment facilitation) because this is when the customer benefits from Adevinta’s transactional services.

Contract costs

Adevinta applies the optional practical expedient to immediately expense incremental commission fees paid to obtain a contract if the amortisation period of the asset that would have been recognised is one year or less. If this is the case, sales commissions are immediately recognised as an expense and included as part of other operating expenses.

Estimation uncertainty

For classified revenues from certain listing fees and premium products recognised over time, judgement is required in determining the normal pattern of views for ads displayed for a defined maximum period of time. The management believes that, based on past experience, in some cases a declining rate is the most appropriate reflection of the normal pattern of views, meaning that certain ads are viewed more frequently in the beginning of the display period than towards the end of the maximum period, and in other cases a straight line rate is most appropriate. Relevant contracts applying this recognition principle normally have a duration of between 30 and 60 days.

Revenue from contracts with customers


	2021	2020
Revenue from contracts with customers	1,138	670
Other revenues	2	3
Operating revenues	1,139	673

Contracts with customers typically have a contract period of one year or less and do not contain significant variable consideration.

Revenue is measured at the transaction price agreed under the contract. Adevinta does not have any contracts where the period between the transfer of the promised services to the customer and payment by the customer exceeds one year. As a consequence, Adevinta does not adjust any of the transaction prices for the time value of money.

Adevinta has no significant obligations for refunds, warranties or other similar obligations.

Disaggregation of revenues

In the following table, revenue is disaggregated by category.


2021 € million	France	Mobile.de	European Markets	International Markets	Disposals	Other/ Head-quarters	Total
Advertising revenues	69	15	132	19	2	4	241
Classified revenues	379	130	324	48	2	0	883
Other revenues	3	6	1	0	–	4	14
Revenues from contracts with customers	451	151	457	67	3	8	1,138
Revenues from lease contracts, government grants and others	0	–	1	0	0	1	2
Operating revenues from external customers	451	151	458	67	3	9	1,139


2020 € million	France	Mobile.de	European Markets	International Markets	Disposals	Other/ Head-quarters	Total
Advertising revenues	66	–	43	1	8	–	118
Classified revenues	323	–	206	6	11	0	546
Other revenues	4	–	0	0	0	3	7
Revenues from contracts with customers	392	–	249	7	19	3	670
Revenues from lease contracts, government grants and others	0	–	0	–	0	2	3
Operating revenues from external customers	392	–	250	7	19	5	673

Operating revenues by category:


€ million	2021	2020
Advertising revenues	241	118
Classified revenues	883	546
of which transactional	44	22
Other operating revenues	15	10
Operating revenues	1,139	673

Contract assets and liabilities

The contract assets primarily relate to Adevinta’s rights to consideration for advertisements delivered but not billed at the reporting date. The contract assets are transferred to receivables when the rights to receive consideration become unconditional. No significant credit losses are expected on contract assets.

The contract liabilities relate to payments received in advance of performance under advertising and classified contracts. Contract liabilities are recognised as revenue when Adevinta performs under the contract.

The following table provides information about receivables and significant changes in contract assets and contract liabilities from contracts with customers.


	Receivables from contracts with customers	Contract assets	Contract liabilities
Balance as at 1 January 2021	85	6	58
Net of cash received and revenues recognised during the period from continuing operations	9	11	7
Net of cash received and revenues recognised during the period from discontinued operations	2	0	(0)
Transfer from contract assets recognised at the beginning of the period to receivables	6	(6)	–
Acquisitions through business combinations (note 4)	50	33	3
Disposals through sales of businesses	(2)	(0)	(0)
Impairment losses recognised during the period from continuing operations	(3)	–	–
Impairment losses recognised during the period from discontinued operations	(0)	–	–
Reclassification to assets held for sale	(4)	(5)	(0)
Translation differences	0	0	0
Balance as at 31 December 2021	143	39	68


	Receivables from contracts with customers	Contract assets	Contract liabilities
Balance as at 1 January 2020	95	8	57
Net of cash received and revenues recognised during the period	(6)	7	3
Transfer from contract assets recognised at the beginning of the period to receivables	7	(7)	–
Acquisitions through business combinations	0	–	0
Disposals through sales of businesses	(3)	(1)	(1)
Impairment losses recognised	(7)	–	–
Translation differences	(1)	(0)	(1)
Balance as at 31 December 2020	85	6	58

All contracts have a duration of one year or less, hence contract liability at the beginning of the period is recognised as revenue during the period. Remaining performance obligations at the reporting date have original expected durations of one year or less. The Group applies the practical expedient and does not disclose information about remaining performance obligations that have an original expected duration of one year or less.

Contract costs

In 2021 and 2020, no significant incremental commission fees were capitalised and no impairment loss related to capitalised contract costs was recognised.

NOTE 8: OTHER OPERATING EXPENSES


	2021	2020
Commissions	14	14
Rent, maintenance, office expenses and energy	13	11
Marketing spend	155	80
Professional fees	108	41
Travelling expenses	3	3
IT expenses	75	55
Other expenses	47	29
Total	415	233

The increase in other operating expenses in 2021 is mainly due to the acquisition of eBay Classifieds Group. In addition, there has been an increase in marketing spend, notably in Spain and Italy, and an increase in costs from transaction services as a result of higher transaction volumes combined with promotional campaigns to drive increased adoption.

NOTE 9: PERSONNEL EXPENSES AND REMUNERATION


	2021	2020
Salaries and wages	283	205
Social security costs	72	60
Net defined benefit expense	2	2
Net defined contribution expense	2	0
Share-based payment	31	7
Other personnel expenses(1)	(19)	(17)
Total	371	258

Average number of full-time equivalents	4,331	4,096

(1) Other personnel expenses are deducted with the amount of capitalised salaries, wages and social security.

From total personnel expenses and remuneration, €368 million are presented in Personnel expenses (€258 million in 2020) and €3 million are presented in Other income and expenses (€0 million in 2020) in the Consolidated income statement.

Details of salary, variable pay and other benefits provided to Group management* (in € 1,000):


	2021	2020
Salary incl. holiday pay	2,711	2,165
Variable pay	3,735	731
Share-based payment (earned)(1,2)	3,328	2,668
Other remuneration/benefit	415	249
Total	10,191	5,814
Accrued pension expenses	371	316

1) Cost details and valuation of share-based payment are disclosed in note 10.

2) Shared-based payment is the accrued amounts related to 2021 (the amounts do not necessarily reflect actual shares transferred or cash payments) for the Schibsted legacy programmes and Adevinta programmes. For further details see note 10.

*Group Management composition at 31 December 2021: Rolv Erik Ryssdal (CEO), Uvashni Raman (CFO), Renaud Bruyeron (Chief Product and Technology Officer (Interim)), Nicki Dexter (Chief People and Communications Officer), Antoine Jouteau (CEO Adevinta France), Patricia Lobinger (CEO Mobile.de (interim)), Gianpaolo Santorsola (EVP European Markets) and Zac Candelario (EVP International Markets). In addition, from 1 January 2021 to 26 June 2021 Ovidiu Solomonov (SVP Global Markets) and from 26 June 2021 to 26 October 2021 Malte Krueger (CEO Mobile.de) were part of Group Management.

Group Management composition at 31 December 2020: Rolv Erik Ryssdal (CEO), Uvashni Raman (CFO), Renaud Bruyeron (Chief Product and Technology Officer (Interim)), Nicki Dexter (Chief People and Communications Officer), Antoine Jouteau (CEO Adevinta France), Gianpaolo Santorsola (EVP European Markets) and Ovidiu Solomonov (SVP Global Markets).

Some of the members receive salaries in other currencies than €. Average annual exchange rates are used to translate the number in the table above into €.

Remuneration(1) to the Board of Directors (in € 1,000):


	2021	2020
Board remuneration	513	324
Remuneration Committee	25	19
Audit Committee	36	39
Integration Committee	36	–
Nomination Committee	26	13
Total remuneration	636	395

(1) The 2021 remuneration refers to agreed remuneration for 2021, 50% was paid in 2021 and 50% is due to be paid in 2022. The 2020 remuneration refers to agreed remuneration for 2020 that was paid in 2021.

For further information regarding management remuneration please see Adevinta 2021 Remuneration Report that will be published in relation to the Annual General Meeting scheduled to be held in June 2022.

NOTE 10: SHARE-BASED PAYMENT

Principle

In equity-settled share-based payment transactions with employees, the employee services and the corresponding equity increase are measured by reference to the fair value of the equity instruments granted. The fair value of the equity instruments is measured at grant date and is recognised as personnel expenses and equity increase immediately or over the vesting period when performance vesting conditions require an employee to serve over a specified time period.

At each reporting date the entities remeasure the estimated number of equity instruments that are expected to vest taking into account the estimated forfeiture rate. The amount recognised as an expense is adjusted to reflect the number of equity instruments which are expected to be, or actually become, vested.

In cash-settled share-based payment transactions with employees, the employee services and the incurred liability are measured at the fair value of the liability. The employee services and the liability are recognised immediately or over the vesting period when performance vesting conditions require an employee to serve over a specified time period. Until the liability is settled, the fair value of the liability is revised at each reporting date and at settlement date, with changes in fair value recognised in profit or loss.

Long-term incentive plans

•The senior employees of Adevinta including the Adevinta executive management team were granted in June 2019 (with effect from 10 April 2019) a so‑called Transition Award and the Adevinta Performance Share Plan (PSP).

•In addition, some members of the Adevinta executive management team have individual share‑based programmes.

•In May 2020, the Adevinta PSP for 2020 was granted to senior employees of Adevinta. In July 2021, the Adevinta PSP for 2021, including the Merger and New Joiner awards, were granted to senior employees of Adevinta.

In addition, from June to November 2021 the Legacy Equity Plan (LEP), DAVI Plan and Spot Equity (Integration) awards were granted to key management and some employees of Adevinta in relation to the acquisition of eBay Classifieds Group.

All amounts presented below related to long-term incentives are in connection with these schemes and with local programmes in Distilled Sch Ltd.


	2021	2020
Share-based costs (included in personnel expenses) (note 9)	31	7
Of which equity-settled	30	7
Of which cash-settled	1	1


	2021	2020
Liabilities arising from share-based payment transactions	3	1

Settlement of rights

•In 2020 LTI awards were settled in the form of 231,003 treasury shares.

•Existing awards in the KCP programme were settled in cash during 2020 with a pay-out of €0 million. Existing awards in the SEP programme were settled in cash during 2020 and 2021 with a pay-out of €0 million and €0 million respectively.

•In addition, in October 2020 52,469 treasury shares were transferred to the employees in relation to other awards.

•The Transition award granted to some senior employees in 2019 was paid in treasury shares in April and May 2021 with a pay-out of 382,184 treasury shares.

In addition, in July 2021 2,293 treasury shares were transferred to its share custodian as part of an acceleration of the matching shares for the Shpock employees that were participating in Adevinta's employee share saving plan and in December 2021 46,696 treasury shares were transferred to the employees in relation to bonus matching shares given to employees who enrolled in the employee share saving plan.

The Adevinta Performance Share Plan (“PSP”)

In June 2019 (with effect from 10 April 2019), in May 2020 (with effect from 1 January 2020), and in July 2021 (with effect from 1 January 2021), the PSP was granted to senior employees of Adevinta including the Adevinta executive management team. Under the PSP, the employees will be granted awards of Adevinta ASA shares on an annual basis. These shares will be subject to a three‑year vesting period (for the Adevinta executive management team the vesting is subject to an additional holding and employment period meaning that 50% of their awards vests after three years, 25% of their awards vests after four years and the remaining 25% of their awards vests after 5 years for the 2019 and 2020 awards and the 2021 awards vest 100% after three years but are subject to a further two year holding requirement), at the end of which they will be transferred to the employee. Under the PSP, the employee will be granted an award over Adevinta ASA shares based on their prescribed maximum opportunity under the plan (for the Adevinta executive management team the maximum amount is in the range of 175% and 300% of his/her base salary). The number of shares the employee receives will depend on the Adevinta ASA share price performance against a peer group (relative Total Shareholder Return (TSR)) over a three‑year performance period. The payout mechanism related to the PSP is as follows:

•For minimum payout, Adevinta ASA shares must perform better than 50% of Adevinta ASA’s peers (“median” relative TSR). If this is achieved, 25% of the shares granted to the employees under the PSP award will be transferred to the employee after the performance period.

•For maximum payout, Adevinta ASA shares must perform better than 75% of Adevinta ASA’s peers (“upper quartile” relative TSR). If this is achieved, 100% of the shares granted to the employee under the PSP award will “vest” and be transferred to the employee.

•The payout is linear between the minimum and maximum payout.

The fair value of shares granted has been estimated at the date of grant using a Monte‑Carlo simulation model, taking into account the terms and conditions on which the share options have been granted. The model simulates the TSR and compares it against a group of peers. It takes into account the projection period, the share price (Adevinta ASA share price) at grant date, the risk-free interest rate, the dividend yield, the share price volatility of both Adevinta ASA and the peer group, future expected correlation of comparators’ TSR and initial TSR performance.

The peer group regarding the PSP is the group of companies in the STOXX Europe 600 Index (Europe’s 600 largest listed companies that are between half and twice the size of Adevinta ASA, as measured by market capitalisation at date of grant). The total fair value of the PSP granted in 2019, 2020 and 2021 was estimated at the grant date to be €9 million, €4 million and €13 million respectively, which will be expensed over the vesting period subject to forfeiture.

Legacy equity plan (“LEP”)

The LEP awards were granted on 6 August 2021 and will vest in installments as set out below. Awards under the LEP were issued to employees of eBay Classifieds Group as a voluntary replacement of the unvested awards previously issued by eBay (eCG’s former parent company), which lapsed and were forfeited as a result of Adevinta ASA’s acquisition of eBay Classifieds Group.

LEP – Executive awards (“ELEP”)

For executives, 100% of the LEP awards will vest subject to a relative TSR performance condition which is applied following the end of each performance period, as follows:

•Tranche 1: on 31 March 2022

•Tranche 2: on 31 March 2023

•Tranche 3: on 31 March 2024

•Tranche 4: on 31 March 2025

Under the relative TSR performance condition, over each performance period commencing on 25 June 2021 and ending on the dates specified above, the growth in Adevinta’s TSR will be compared to the growth in the TSR of the constituents of the Comparator Group (determined in the same way as the PSP Awards). If the TSR of Adevinta from the grant date to the end of the relevant Performance Period is equal to or greater than that achieved by the median company in the Comparator Group, 100% of the LEP awards will vest. Otherwise, 75% of the LEP awards will lapse and, unless the CEO determines otherwise, the remaining 25% of the LEP awards will also lapse. TSR growth is measured using the average TSR in the 30-calendar day period from 25 June 2021 and 30 calendar day period preceding the end of the performance period.

LEP – Non-executive awards (“NLEP”)

For non-executives, the LEP awards are not subject to any performance conditions and will vest as follows:

•Tranche 1: on 31 March 2022

•Tranche 2: on 30 September 2022

•Tranche 3: on 31 March 2023

•Tranche 4: on 30 September 2023

•Tranche 5: on 31 March 2024

•Tranche 6: on 30 September 2024

•Tranche 7: on 31 March 2025

The total fair value of the LEP awards was estimated at the grant date to be €59 million which will be expensed over the vesting period subject to forfeiture.

Merger awards

The merger awards were granted on 12 July 2021 and will vest on 31 December 2023 and are not subject to any performance targets.

Merger awards – Executive (“EMA”)

For executives, the Merger awards are subject to a minimum shareholding requirement (a non-vesting condition) and to a two-year holding period from the date of vesting.

During the EMA holding period, employees may not dispose of any plan shares which vest except to cover any income tax or social security contributions arising on the vesting of the executive Merger awards. If the employee leaves during this period, they do not forfeit their right to the vested shares, however it does not accelerate completion of the EMA Holding Period.

Merger Awards – Non-Executive (“NEMA”)

For non-executives, the Merger awards are not subject to a minimum shareholding requirement nor holding period.

The total fair value of the Merger awards was estimated at the grant date to be €5 million which will be expensed over the vesting period subject to forfeiture.

New Joiner awards

The New Joiner awards were granted on 12 July 2021 and will vest on 12 July 2022 and are not subject to any performance targets.

The total fair value of the New Joiner awards was estimated at the grant date to be €1 million which will be expensed over the vesting period subject to forfeiture.

Deferred Annual Variable Incentive award (“DAVI awards”)

Under the DAVI awards, employees are issued a conditional award over Adevinta shares following the outcome of a one-year performance period (“DAVI performance period”) where two types of non-market-based performance targets apply, being financial targets and strategic targets (both non-market conditions under IFRS 2).

Subject to continued employment, 50% of the shares will vest on the first anniversary after the end of the performance period and 50% of the shares will vest on the second anniversary after the end of the performance period.

The performance period of the 2021 DAVI awards started on 25 June 2021 and ended on 31 December 2021.

The total fair value of the DAVI awards was estimated at the grant date to be €14 million which will be expensed over the vesting period subject to forfeiture.

Spot Equity (Integration) awards

The Spot Equity awards were granted on 1 November 2021. Subject to continued employment, 50% of the shares will vest on the first anniversary of the grant date and 50% of shares will vest on the second anniversary of the grant date.

The total fair value of the Spot awards was estimated at the grant date to be €3 million which will be expensed over the vesting period subject to forfeiture.

The Adevinta Share Purchase Plan (“ASPP”)

Adevinta employees can participate in the Adevinta Share Purchase Plan (ASPP). As a participant of the ASPP, Adevinta employees have the opportunity to purchase Adevinta ASA shares through contributions from their salary (“Purchased Shares”) and receive a Company matching award of free shares in proportion to their Purchased Shares (“Matching Share Award”), subject to the employee remaining an Adevinta employee and not selling the Purchased Shares for a period of two years. The maximum contribution an employee may make each year will be €7,500 or an amount equal to 5% of their gross salary (if lower). For the enrolment in the ASPP until mid-September 2019 the employees’ Matching Share Award comprised two shares for every Purchased Share. Thereafter, the Matching Share Award comprises one share for every Purchased Share.

Shares granted, not vested

The table below includes the development in shares for programmes to be settled in equity that have been granted in Adevinta ASA shares during 2021, 2020 and 2019. It does not include the KCP and the SEP programmes as they were settled in cash according to the value of the outstanding Schibsted shares held by the participants as of the date of modification of these schemes.


Number of Adevinta shares in share-based payment programmes:	2021	2020
Number of shares granted, not-vested at 1 January	2,972,659	2,255,294
Number of shares granted	5,399,402	1,219,763
Number of shares forfeited	(682,579)	(201,182)
Number of shares vested	(431,173)	(283,472)
Number of shares converted into cash	(11,298)	(17,744)
Adjustment of shares granted (*)	(5,474,194)	–
Number of shares not vested at 31 December	1,772,817	2,972,659
Weighted average share price at vesting date for awards vested during the year (NOK per share)	133.3	110.4
Weighted average fair value at grant date for awards granted during the year (NOK per share)	154.6	61.9

(*) Adjustment of shares granted mainly reflects changes in estimated payout from grant date.

In 2021 and 2020, the accounting effects of the share-based payment programmes were as follows:


2021	Personnel cost	Increase in equity	Increase in liabilities
PSP 2019	2	2	0
PSP 2020	1	1	0
PSP 2021	2	2	0
LEP award	19	18	1
Merger award	1	1	0
New joiner award	0	0	0
DAVI award	3	3	0
Spot award	0	0	0
LTI and Transition award	0	0	0
Employee share savings plan	1	1	0
Total	31	27	2


2020	Personnel cost	Increase in equity	Increase in liabilities
PSP 2019	3	3	0
PSP 2020	1	1	0
LTI and Transition award	2	2	0
Employee share savings plan	1	1	0
Total	7	7	0

NOTE 11: OTHER INCOME AND EXPENSES

Principle

Income and expenses of a special nature are presented on a separate line within operating profit (loss). Such items are characterised by being transactions and events not considered to be part of activities in the normal course of business and not being reliable indicators of underlying operations. Other income and expenses include items such as restructuring costs, acquisition-related costs, gains or losses on sale or remeasurement of assets, investments or operations and other expenses. Acquisition-related costs may include both costs related to acquisitions done and transactions that were not completed.


€ million	2021	2020
Gain (loss) on sale and remeasurement of subsidiaries, joint ventures and associates (note 5)	–	7
Other	0	0
Other income or gain	0	7
Gain (loss) on sale and remeasurement of subsidiaries, joint ventures and associates (note 4 and 5)	(37)	–
Restructuring costs	(5)	(2)
IPO-related costs	(2)	(3)
Acquisition-related costs (note 4)	(49)	(32)
Integration-related costs	(47)	(6)
Gain (loss) on sale of intangible assets and property, plant & equipment	(1)	(1)
Other	(0)	(2)
Other expenses or loss	(140)	(47)
Total	(140)	(39)

Acquisition-related costs of €49 million and integration-related costs of €47 million in 2021 (€32 million and €6 million respectively in 2020) mainly relate to the acquisition of eBay Classifieds Group .

Restructuring costs of €5 million in 2021 (€2 million in 2020) consist primarily of costs from restructuring processes in International Markets and Other/Headquarters.

NOTE 12: FINANCIAL ITEMS


Financial income and expenses consist of:
	2021	2020
Interest income	9	1
Gain on sale of equity instruments	3	–
Other financial income	1	4
Total financial income	13	5

Interest expenses	(60)	(10)
Net foreign exchange loss	(2)	(84)
Other financial expenses	(15)	(5)
Total financial expenses	(78)	(99)

Net financial items	(65)	(95)


Interest expenses consist of:
	2021	2020
Interest on Senior Security Notes (note 23)	(30)	(5)
Interest on EUR TLB (note 23)	(15)	–
Interest on USD TLB (note 23)	(7)	–
Interest on lease liabilities (note 31)	(2)	(2)
Interest on put options (note 20 and 24)	(0)	(0)
Interest expense on other borrowings measured at amortised cost	(6)	(3)
Total interest expenses	(60)	(10)

In 2021, €9 million (€1 million in 2020) interest income relates to the loan denominated in Brazilian real granted by Adevinta Finance AS to Bom Negócio Atividades de Internet Ltda in 2020 (note 22) and €3 million gain on sale of equity instruments relates to the sale of the shares in Bipi Mobility, S.L. (note 18).

Interest expenses and other financial expenses in 2021 are mainly related to new financing obtained in connection to the eCG acquisition (note 23). Other financial expenses in 2021 are mainly due to amortisation of the costs directly attributable to the issue of the new financing using the effective interest method.

In 2020, net foreign exchange loss resulted mainly from a €79 million loss with respect to the derivatives entered into in relation to the Grupo Zap acquisition (€67 million) and the expected acquisition of the eBay Classifieds Group (€12 million), the loss of €9 million in relation to loan denominated in euro granted by Adevinta Netherlands NV to Infojobs Brasil Atividades de Internet Ltda and a gain of €6 million in relation to the loan denominated in Brazilian real granted by Adevinta Finance AS to Bom Negócio Atividades de Internet Ltda in 2020 (note 22).

NOTE 13: INCOME TAXES

Principle

Current tax liabilities and assets are measured as the amount that is expected to be paid to or recovered from the tax authorities.

Deferred tax liabilities and assets are computed for all temporary differences between the tax base and the carrying amount of an asset or liability in the consolidated financial statements and the tax base of tax losses carried forward. For deferred tax assets and liabilities, the nominal tax rates expected to apply when the asset is realised or the liability is paid are used.

Deferred tax assets relating to tax deficits and other tax-reducing temporary differences are recognised to the extent that it is probable that they can be applied against future taxable income.

Deferred tax liabilities for temporary differences associated with investments in subsidiaries, associates and joint ventures are recognised when it is probable that the temporary difference will reverse in the foreseeable future. Deferred tax liabilities are not recognised for the initial recognition of goodwill.

Tax expense (tax income) comprises current tax expense (current tax income) and deferred tax expense (deferred tax income). Any amounts recognised as current tax assets or liabilities and deferred tax assets or liabilities are recognised in profit or loss, except to the extent that the tax arises from a transaction or event recognised in other comprehensive income or directly in equity or arises from a business combination.

Estimation uncertainty

Judgement is required to determine the amount of deferred tax assets that can be recognised, based on the likely timing and the level of future taxable profits together with tax planning strategies. For unrecognised deferred tax assets see table below.

Adevinta’s income tax expense comprises the following:


	2021	2020
Current income taxes	65	53
Deferred income taxes	(46)	(23)
Taxes	19	31
Of which recognised in profit or loss from continuing operations	19	31
Of which recognised in other comprehensive income	0	0

Adevinta’s underlying tax rate differs from the nominal tax rates in countries where Adevinta has operations. The relationship between tax expense and accounting profit (loss) before taxes is as follows:


	2021	2020
Profit (loss) before taxes	(35)	(39)
Estimated tax expense based on nominal tax rate in Norway of 22%	(8)	(9)
Tax effect share of profit (loss) of joint ventures and associates	2	(4)
Tax effect impairment loss goodwill	1	9
Tax effect gain (loss) on sale and remeasurement of subsidiaries, joint ventures and associates	8	(1)
Tax effect other permanent differences	15	5
Current period unrecognised deferred tax assets	9	39
Reassessment of previously unrecognised deferred tax assets	–	(18)
Reassessment of previously recognised deferred tax assets including changes in tax rates	(9)	0
Effect of tax rate differentials abroad	2	9
Taxes recognised in profit or loss from continuing operations	19	31

Tax effect of other permanent differences in 2021 mainly include tax effect from non-deductible operating expenses and acquisition related costs and tax-free dividends.

Tax expense for 2021 is positively impacted by €9 million from the reassessment of previously unrecognised deferred tax assets (€18 million in 2020). The recognition is based on obtaining assurance that future tax benefits can now be utilised against taxable profits of tax groups in Spain and France.

Adevinta’s net deferred tax liabilities (assets) are made up as follows:


	2021	2020
Current items	(10)	(6)
Intangible assets	816	79
Other non-current items	(21)	(9)
Unused tax losses	(149)	(137)
Calculated net deferred tax liabilities (assets)	636	(73)
Unrecognised deferred tax assets	108	130
Net deferred tax liabilities (assets) recognised	744	57
Of which deferred tax liabilities	896	58
Of which deferred tax assets	(152)	(2)

Adevinta's unrecognised deferred tax assets relate mainly to foreign operations with tax losses where future taxable profits may not be available before unused tax losses expire, which mainly relate to operations in Mexico, Italy and Norway. The majority of these tax losses can be carried forward for an unlimited period. Approximately 12% of the unused tax losses expire during the first ten years.

The development in the recognised net deferred tax liabilities (assets):


	2021	2020
As at 1 January	57	81
Change included in tax expense from continuing operations	(46)	(23)
Change included in tax expense from discontinued operations	0	–
Change from purchase and sale of subsidiaries	750	(1)
Reclassification to assets held for sale	(14)	–
Disposal through sales of businesses	(4)	–
Translation differences	2	(0)
As at 31 December	744	57

Deferred tax liabilities and assets are offset for liabilities and assets in companies which are included in local tax groups.

NOTE 14: EARNINGS PER SHARE

Principle:

Earnings per share and diluted earnings per share are presented for ordinary shares. Earnings per share is calculated by dividing profit (loss) attributable to owners of the parent by the weighted average number of shares outstanding, excluding treasury shares. Diluted earnings per share is calculated by dividing profit (loss) attributable to owners of the parent by the weighted average number of shares outstanding, adjusted for all dilutive potential shares.

The weighted average number of shares outstanding is adjusted for the effects of any potential dilutive shares as at the reporting date as follows:

•For share-based payment programmes where Adevinta is committed to match shares purchased by employees without performance conditions, by including the expected number of matching shares that would be issuable.

•For other share-based payment programmes, by including the number of shares that would be issuable based on the number of shares granted less the number of shares forfeited.

Adjusted earnings per share is calculated as profit (loss) attributable to owners of the parent adjusted for items reported in the Consolidated income statement as Other income and expenses and Impairment loss, adjusted for taxes and non-controlling interests. The number of shares included in the calculation is the same as the number for earnings per share and diluted earnings per share, as described above.


€ million	2021	2020
Weighted average number of shares outstanding	963,425,437	684,896,644
Effects of dilution	1,707,094	2,807,002
Weighted average number of shares outstanding – diluted	965,132,530	687,703,646
Profit (loss) attributable to owners of the parent	(54)	(72)
Continuing operations	(60)	(72)
Discontinued operations	7	–
Earnings per share (€)	(0.06)	(0.10)
Continuing operations	(0.06)	(0.10)
Discontinued operations	0.01	–
Diluted earnings per share (€)	(0.06)	(0.10)
Continuing operations	(0.06)	(0.10)
Discontinued operations	0.01	–

Calculation of adjusted earnings per share from continuing operations
Profit (loss) attributable to owners of the parent	(54)	(72)
Other income and expenses	140	39
Impairment loss	22	43
Taxes and non-controlling effect of Other income and expenses and Impairment loss	(15)	(1)
Profit (loss) attributable to owners of the parent - adjusted	93	10
Earnings per share from continuing operations – adjusted (€)	0.10	0.01
Diluted earnings per share from continuing operations – adjusted (€)	0.10	0.01

NOTE 15: IMPAIRMENT ASSESSMENTS

Principle

Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired.

Property, plant & equipment and intangible assets that have a finite useful life and right-of-use assets are reviewed for impairment whenever there is an indication that the carrying amount may not be recoverable. Impairment indicators will typically be changes in market developments, competitive situations or technological developments. Climate-related changes and events could also be impairment indicators.

An impairment loss is recognised in the Consolidated income statement if the carrying amount of an asset (cash-generating unit) exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use.

Value in use is assessed by discounting estimated future cash flows. Estimated cash flows are based on management’s expectations and market knowledge for the given period, normally five years. For subsequent periods growth factors that do not exceed the long-term average rate of growth for the relevant market are used. Expected cash flows are discounted using a pre-tax discount rate that takes into account the current market assessment of the time value of money and the risks specific to the assets being tested.

For the purpose of impairment testing, assets, except goodwill, are grouped together into the smallest group of assets that generates independent cash inflows (cash-generating units). Goodwill is allocated to the cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the business combination. Testing for impairment of goodwill is done by comparing the recoverable amount and carrying amount of the groups of cash-generating units to which goodwill is allocated.

Impairment losses recognised in respect of cash-generating units are first allocated to reduce the carrying amount of any goodwill. Any remaining amount is then allocated to reduce the carrying amounts of the other assets in the unit on a pro rata basis. Impairment losses are reversed for all property, plant & equipment and intangible assets if the loss no longer exists with the exception of goodwill where impairment losses are not reversed. The review for possible reversal of the impairment is performed at the end of each reporting period.

Estimation uncertainty

The valuation of intangible assets in connection with business combinations and the testing of intangible assets for impairment will to a large extent be based on estimated future cash flows.

Estimates related to future cash flows and the determination of discount rates to calculate present values are based on management’s expectations on market developments and conditions, the competitive environment, technological development, the ability to realise synergies, interest rate levels and other relevant factors.

The risk of changes in expected cash flows that affect the consolidated financial statements will naturally be higher in markets in an early phase than in established markets. Furthermore, the risk of changes will be significantly higher in periods with an uncertain macroeconomic environment as is the case during Covid pandemic.

Goodwill and trademarks with indefinite expected useful life specified on cash-generating units


		GOODWILL		TRADEMARKS, INDEFINITE
	Operating segment	2021	2020	2021	2020
Online classifieds France	France	1,019	504	98	98
Online classifieds Italy, Austria, Germany and UK	Disposals	–	2	–	23
Online classifieds Spain	European Markets	493	345	19	19
Online classifieds Chile	Disposals	–	12	–	6
Online classifieds Ireland	European Markets	37	37	16	16
Online classifieds Hungary	European Markets	30	24	2	2
Online classifieds Spain, Italy and Mexico	European Markets / International Markets	–	–	129	129
Online classifieds Belarus	European Markets	1	–	–	–
Online classifieds Mexico	International Markets	7	7	0	0
Online classifieds Italy	European Markets	96	5	–	–
Online classifieds Germany (Mobile.de)	Mobile.de	2,336	–	1,707	–
Online classifieds Germany (eBayK)	European Markets	3,641	–	–	–
Online classifieds Belgium	European Markets	49	–	58	–
Online classifieds Netherlands	European Markets	134	–	798	–
Online classifieds Canada	International Markets	576	–	630	–
Total (note 16)		8,420	936	3,457	293

Impairment testing and assessments

Adevinta recognized impairment losses related to goodwill and trademarks with an indefinite useful life of €2 million and €18 million, respectively, in 2021 both related to Shpock (Austria) (note 4) and €42 million in 2020 related to Yapo (Chile).

The carrying amounts of goodwill and other intangible assets with indefinite useful lives are disclosed above. Recoverable amounts of cash-generating units, except for Online Classified Mexico, are estimated based on value in use. Discount rates applied take into consideration the risk-free interest rate and risk premium for the relevant country as well as any business specific risks not reflected in estimated cash flows. Expected sustained growth reflects expected growth for the relevant market.

In estimating cash flows used in calculating value in use, consideration is given to the competitive situation, current developments in revenues and margins, trends and macroeconomic expectations for the relevant operations or markets.

The Group constantly monitors the latest government legislation in relation to climate-related matters. At the current time, no legislation has been passed that will impact the Group. The Group will adjust the key assumptions used in value in use calculations and sensitivity to changes in assumptions should a change be required.

Pre-tax discount rates are determined by country and are in the range between 7.5% and 18.3%. Sustained growth is determined by cash-generating units and are in the range between 1.2% and 5.2%. Based on current estimates, no impairment loss has been recognised in 2021.

The recoverable amount of Online Classified Mexico is determined based on fair value less costs of disposal (FVLCD) using Revenue multiples approach. The valuation is considered to be level 3 in the fair value hierarchy due to unobservable inputs used in the valuation. No impairment was identified. The key assumptions used were based on the Group’s experience with disposal of similar assets as follows:


Unobservable inputs			Value assigned to key assumptions
Revenue multiples			2.43
Cost of disposal			€1 million

NOTE 16: INTANGIBLE ASSETS

Principle

Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill is not amortised but it is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired (note 15), and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

Intangible assets are measured at cost less accumulated amortisation and accumulated impairment losses. Amortisation of intangible assets with a finite useful life is allocated on a systematic basis over their useful life. Intangible assets with an indefinite useful life are not amortised.

Costs of developing software and other intangible assets are expensed until all recognition criteria are met, including the following:

•it can be demonstrated that the asset will generate probable future economic benefits; and

•the cost of the asset can be measured reliably.

The cost of an internally generated intangible asset is the sum of expenditures incurred from the time all requirements for recognition as an asset are met and until the time the asset is capable of operating in the manner intended by management.

Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.

Subsequent expenditures incurred in the operating stage to enhance an intangible asset are expensed as incurred unless the asset recognition criteria, including the ability to demonstrate increased probable economic benefits, are met. Assets maintenance costs are expensed as incurred.

Intangible assets with a finite expected useful life are amortised on a straight-line basis from the point at which the asset is ready for use over the expected useful life. The amortisation period of software and licenses is normally 3 years, for trademarks 3 years, for customer relationships 9 to 11 years, and for other intangible assets it is between 1.5 and 10 years.

Estimation uncertainty

The amortisation method, expected useful lives and residual values used in the calculation of amortisation are based on estimates and are reassessed annually.

Adevinta has significant activities related to developing new technology to deliver digital classified and advertising products for our customers and users. Judgment is required to determine whether the asset recognition criteria are met.


	Goodwill	Trademarks, indefinite	Trademarks, definite	Software and licenses	Customer relations	Total
Development in net carrying amount in 2021
As at 1 January	936	293	2	84	7	1,322
Additions	–	11	–	56	–	67
Acquired through business combinations	7,532	3,205	150	276	497	11,660
Disposals	–	–	(0)	(1)	–	(1)
Disposal through sales of businesses	(12)	(10)	(0)	(5)	–	(27)
Reclassification to assets held for sale	(35)	(31)	–	(18)	(7)	(90)
Amortisation	–	–	(25)	(76)	(25)	(126)
Impairment losses	(2)(1)	(19)(1)	–	(2)	–	(22)
Translation differences	0	8	0	1	1	9
As at 31 December	8,420	3,457	127	313	474	12,790
Of which accumulated cost	8,620	3,457	161	555	529	13,321
Of which accumulated amortisation and impairment loss	(200)	–	(34)	(242)	(55)	(531)


	Goodwill	Trademarks, indefinite	Trademarks, definite	Software and licenses	Customer relations	Total
Development in net carrying amount in 2020
As at 1 January	1,006	296	2	80	12	1,395
Additions	1	–	0	37	–	39
Acquired through business combinations	1	–	–	0	–	1
Disposals	–	–	–	(1)	–	(1)