Please wait

 

United states
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6‑K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a‑16 OR 15d‑16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934

For the month of February 2026

LG Display Co., Ltd.
(Translation of Registrant’s name into English)

LG Twin Towers, 128 Yeoui‑daero, Yeongdeungpo‑gu, Seoul 07336, Republic of Korea
(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20‑F or Form 40‑F.

Form 20‑F X Form 40‑F ____

Indicate by check mark if the registrant is submitting the Form 6‑K in paper as permitted by Regulation S‑T Rule 101(b)(1): ____

Note: Regulation S‑T Rule 101(b)(1) only permits the submission in paper of a Form 6‑K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6‑K in paper as permitted by Regulation S‑T Rule 101(b)(7): ____

Note: Regulation S‑T Rule 101(b)(7) only permits the submission in paper of a Form 6‑K if submission to furnish a report or other document that the registration foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and if discussing a material event, has already been the subject of a Form 6‑K submission or other Commission filing on EDGAR.

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3‑2(b) under the Securities Exchange Act of 1934.

Yes _____ No X

 

 

 

 

Submission of Audit Report

 

1.

Name of external auditor: Samil PricewaterhouseCoopers Accounting Corporation (PwC)

2.

Date of receiving external audit report: February 27, 2026

3.

Auditor’s opinion

 

 

 

FY 2025

 

FY 2024

 

Audit Report on Consolidated Financial Statements

 

Unqualified

 

Unqualified

 

 

 

4.

Financial Highlights of Consolidated Financial Statements

 

 

 

 

 

Items

 

FY2025

 

FY 2024

Total Assets

 

26,916,700,019,086

 

32,859,565,603,472

Total Liabilities

 

19,077,461,849,159

 

24,786,759,041,251

Total Shareholders’ Equity

 

7,839,238,169,927

 

8,072,806,562,221

Capital Stock

 

2,500,000,000,000

 

2,500,000,000,000

Revenues

 

25,810,081,897,948

 

26,615,346,868,922

Operating Income

 

516,977,188,860

 

-560,596,289,460

Ordinary Income

 

501,688,886,933

 

-2,191,539,696,036

Net Income

 

303,807,058,455

 

-2,409,299,854,829

Total Shareholders’ Equity / Capital Stock

 

314%

 

  323%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

 

Consolidated Financial Statements

 

For the Years Ended December 31, 2025 and 2024

 

(With Independent Auditor’s Report Thereon)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contents

 

 

 

 

Page

 

 

 

Independent Auditor’s Report

 

1

 

 

 

Consolidated Statements of Financial Position

 

5

 

 

 

Consolidated Statements of Comprehensive Income (Loss)

 

6

 

 

 

Consolidated Statements of Changes in Equity

 

7

 

 

 

Consolidated Statements of Cash Flows

 

8

 

 

 

Notes to the Condensed Consolidated Financial Statements

 

9

 

 

 

Independent Auditor’s Report on Internal Control over Financial Reporting for Consolidation Purposes

 

112

 

 

 

Management’s Report on the Effectiveness of Internal Control over Financial Reporting for Consolidation Purposes

 

114

 

 

 

img179339159_0.jpg

 

Independent Auditor’s Report

 

(English Translation of a Report Originally Issued in Korean)

 

 

 

 

To the Shareholders and Board of Directors of

LG Display Co., Ltd.

Opinion

 

We have audited the consolidated financial statements of LG Display Co., Ltd. and its subsidiaries (collectively referred to as the "Group"), which comprise the consolidated statements of financial position as at December 31, 2025 and 2024, and the consolidated statements of comprehensive income, consolidated statements of changes in equity and consolidated statements of cash flows for the years then ended, and notes to the consolidated financial statements, including material accounting policy information.

 

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2025 and 2024, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with International Financial Reporting Standards as adopted by the Republic of Korea (Korean IFRS).

 

We also have audited, in accordance with Korean Standards on Auditing, the Group's Internal Control over Financial Reporting for consolidation purposes as of December 31, 2025, based on Conceptual Framework for Designing and Operating Internal Control over Financial Reporting, and our report dated February 27, 2026 expressed an unqualified opinion.

 

Basis for Opinion

 

We conducted our audits in accordance with Korean Standards on Auditing. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the ethical requirements of the Republic of Korea that are relevant to our audit of the consolidated financial statements and we have fulfilled our other ethical responsibilities in accordance with the ethical requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

 

Key Audit Matters

 

Key audit matter is the matter that, in our professional judgment, was of most significance in our audit of the consolidated financial statements of the current period. This matter was addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on this matter.

 

Impairment test of the cash generating unit to which goodwill has been allocated

 

img179339159_1.jpg

 

Reasons why the matter was determined to be a key audit matter

As described in Note 10, the carrying amount of goodwill recognized at the end of the reporting period amounted to W28,307 million, all of which has been allocated to the Display cash generating unit (CGU). The Group performed an impairment test of the Display CGU in accordance with Korean IFRS 1036 Impairment of Assets.

We determined the impairment test of the CGU to which goodwill has been allocated to be a Key Audit Matter considering that significant judgment by management is involved in estimates including projected cash flows and discount rates used in the Group's impairment test.

 

How our audit addressed the Key Audit Matter

We have performed the following audit procedures to address the Key Audit Matter.

•
Understanding and evaluating the accounting policies and internal controls of the Group related to goodwill impairment testing
•
Testing the design and operating effectiveness of internal controls related to impairment testing, including management’s review and approval of the estimated business plan and significant assumptions used in the valuation model
•
Evaluating the completeness and accuracy of the underlying data used in the discounted cash flow model
•
Verifying whether future cash flow estimates are consistent with business plans approved by management
•
Evaluating the appropriateness of significant assumptions used in the valuation model, including discount rates and growth rates, by comparing them with external industry benchmarks and the Group's historical financial information
•
Evaluating the reasonableness of management's business plan estimates by comparing business plans established for the CGU in prior periods with actual performance for the current period
•
Performing sensitivity analysis to assess the extent to which changes in significant assumptions applied in the valuation model could result in an impairment loss
•
Evaluating the appropriateness of the discounted cash flow model, the reasonableness of management’s significant assumptions relating to the discount rate, the reliability of underlying data and the mathematical accuracy of management’s calculation of the estimates by utilizing the auditor’s valuation experts with professional skills and knowledge

 

2

 

Other Matter

 

Auditing standards and their application in practice vary among countries. The procedures and practices used in the Republic of Korea to audit such consolidated financial statements may differ from those generally accepted and applied in other countries.

 

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

 

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with Korean IFRS, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

 

In preparing the consolidated 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 Group or to cease operations.

 

Those charged with governance are responsible for overseeing the Group’s financial reporting process.

 

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

 

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from 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 a guarantee that an audit conducted in accordance with Korean Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

 

As part of an audit in accordance with Korean Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

•
Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. 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.
•
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances.
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
•
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.

3

 

•
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
•
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.

 

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

 

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

 

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

 

The engagement partner on the audit resulting in this independent auditor’s report is Sang-Woo Nam, Certified Public Accountant.

 

 

Seoul, Korea

February 27, 2026

This report is effective as of February 27, 2026, the audit report date. Certain subsequent events or circumstances, which may occur between the audit report date and the time of reading this report, could have a material impact on the accompanying consolidated financial statements and notes thereto. Accordingly, the readers of the audit report should understand that there is a possibility that the above audit report may have to be revised to reflect the impact of such subsequent events or circumstances, if any.

 

 

4

 

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Consolidated Statements of Financial Position

As of December 31, 2025 and 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In millions of won)

 

 

Note

 

December 31, 2025

 

December 31, 2024

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

4, 26

W

1,572,058

 

2,021,640

Deposits in banks

 

4, 26

 

600

 

600

Trade accounts and notes receivable, net

5, 15, 26, 29

 

2,359,184

 

3,624,477

Other accounts receivable, net

5, 26

 

180,413

 

250,029

Other current financial assets

6, 26

 

89,525

 

328,621

Inventories, net

 

 

 

7

 

2,545,666

 

2,671,242

Prepaid income tax

 

 

 

38,558

 

12,774

Assets held for sale

 

1

 

-

 

983,317

Other current assets

 

 

 

196,073

 

230,337

        Total current assets

 

 

6,982,077

 

10,123,037

Deposits in banks

 

4, 26

 

11

 

11

Investments in equity accounted investees

8

 

36,506

 

33,177

Other non-current financial assets

6, 26

 

202,051

 

232,652

Property, plant and equipment, net

9, 18

 

14,470,776

 

17,202,873

Intangible assets, net

 

10, 18

 

1,478,035

 

1,558,407

Investment property

 

11, 18

 

18,031

 

27,911

Deferred tax assets, net

 

24

 

3,510,156

 

3,504,177

Defined benefit assets, net

13

 

198,535

 

160,752

Other non-current assets

 

 

20,522

 

16,569

        Total non-current assets

 

 

19,934,623

 

22,736,529

        Total assets

 

 

 

W

26,916,700

 

32,859,566

Liabilities

 

 

 

 

 

 

 

 

Trade accounts and notes payable

26, 29

W

3,307,687

 

4,156,149

Current financial liabilities

12, 26, 27, 28, 29

 

3,798,394

 

6,527,450

Other accounts payable

26

 

1,461,014

 

1,720,670

Accrued expenses

 

 

 

782,552

 

634,473

Income tax payable, net

 

 

 

39,219

 

65,366

Provisions

 

 

 

14

 

86,290

 

105,251

Advances received

 

 

 

35,981

 

904,628

Liabilities held for sale

1

 

-

 

1,656,841

Other current liabilities

 

 

85,334

 

88,256

        Total current liabilities

 

 

9,596,471

 

15,859,084

Non-current financial liabilities

12, 26, 27, 28, 29

 

8,934,975

 

8,091,407

Non-current provisions

14

 

55,345

 

60,908

Defined benefit liabilities, net

13

 

1,109

 

1,093

Long-term advances received

 

 

-

 

220,500

Other non-current liabilities

26

 

489,562

 

553,767

        Total non-current liabilities

 

 

9,480,991

 

8,927,675

        Total liabilities

 

 

 

W

19,077,462

 

24,786,759

Equity

 

 

 

 

 

 

 

 

 

Share capital

 

 

16

W

2,500,000

 

2,500,000

Share premium

 

 

16

 

2,740,811

 

2,773,587

Retained earnings(Accumulated deficit)

 

 

281,912

 

(18,512)

Reserves

 

 

 

16

 

1,081,401

 

995,823

Accumulated other comprehensive income held for sale

1

 

-

 

291,363

        Equity attributable to owners of the Parent

 

 

6,604,124

 

6,542,261

        Non-controlling interests

 

 

1,235,114

 

1,530,546

        Total equity

 

 

 

 

7,839,238

 

8,072,807

        Total liabilities and equity

 

W

26,916,700

 

32,859,566

 

 

See accompanying notes to the consolidated financial statements.

 

 

5

 

 

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Consolidated Statements of Comprehensive Income (Loss)

For the years ended December 31, 2025 and 2024

 

 

 

 

 

 

 

 

(In millions of won, except earnings (loss) per share amounts)

 

 

 

 

 

 

 

 

 

Note　

 

2025

 

2024

Revenue

17, 18, 29

W

25,810,082

 

26,615,347

Cost of sales

7, 19, 29

 

(22,433,623)

 

(24,039,928)

Gross profit

 

 

3,376,459

 

2,575,419

Selling expenses

19, 20

 

(480,814)

 

(584,692)

Administrative expenses

19, 20

 

(967,882)

 

(1,103,617)

Research and development expenses

19

 

(1,410,786)

 

(1,447,706)

Operating profit (loss)

 

 

516,977

 

(560,596)

Finance income

22

 

578,446

 

883,094

Finance costs

22

 

(1,152,916)

 

(1,821,912)

Other non-operating income

21

 

2,596,150

 

2,100,443

Other non-operating expenses

21

 

(2,039,451)

 

(2,797,981)

Equity in income of equity accounted investees, net

 

 

2,483

 

5,412

Profit (loss) before income tax

 

 

501,689

 

(2,191,540)

Income tax expense

23

 

(197,882)

 

(217,760)

Profit (loss) for the year

 

 

303,807

 

(2,409,300)

Other comprehensive income (loss)

 

 

 

 

 

Items that will never be reclassified to profit or loss

 

 

 

 

 

Remeasurements of net defined benefit liabilities

13, 23

 

74,112

 

(131,835)

Other comprehensive income (loss) from associates

8

 

-

 

(85)

 

 

 

74,112

 

(131,920)

Items that are or may be reclassified to profit or loss

 

 

 

 

 

Foreign currency translation differences for foreign operations

16, 23

 

(184,430)

 

926,637

Other comprehensive income (loss) from associates

8, 16

 

2,272

 

3,320

 

 

 

(182,158)

 

929,957

Other comprehensive income (loss) for the year, net of income tax

 

 

(108,046)

 

798,037

Total comprehensive income (loss) for the year

 

W

195,761

 

(1,611,263)

Profit (loss) attributable to:

 

 

 

 

Owners of the Parent

 

 

226,312

 

(2,562,606)

Non-controlling interests

 

 

77,495

 

153,306

Profit (loss) for the year

 

W

303,807

 

(2,409,300)

Total comprehensive income (loss) attributable to:

 

 

 

 

Owners of the Parent

 

 

94,639

 

(1,923,316)

Non-controlling interests

 

 

101,122

 

312,053

Total comprehensive income (loss) for the year

 

W

195,761

 

(1,611,263)

Earnings (loss) per share (in won)

 

 

 

 

 

Basic earnings (loss) per share

25

W

453

 

(5,438)

Diluted earnings (loss) per share

25

W

453

 

(5,438)

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to the consolidated financial statements.

 

6

 

 

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Statements of Changes in Equity

 

 

 

 

 

 

 

 

 

 

 

 

For the years ended December 31, 2025 and 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

　

　

　

Attributable to owners of the Parent Company

　

　

 

 

 

 

 

 

 

 

 

 

 

Share

capital

 

Share

premium

 

Retained
earnings

(Accumulated deficit)

 

Reserves

 

Other comprehensive income classified

 as held for sale

 

 

 

Non-controlling

interests

 

Total

equity

(In millions of won)

 

 

 

 

 

 

 

 

 

 

 

Sub-total

 

 

 

 

Balances at January 1, 2024

W

1,789,079

 

2,251,113

 

2,676,014

 

515,976

 

-

 

7,232,182

 

1,538,362

 

8,770,544

Total comprehensive income (loss) for the year

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit (loss) for the year

 

-

 

-

 

(2,562,606)

 

-

 

-

 

(2,562,606)

 

153,306

 

(2,409,300)

Other comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Remeasurements of net defined benefit liabilities

 

-

 

-

 

(131,835)

 

-

 

-

 

(131,835)

 

-

 

(131,835)

Classified as held for sale

 

-

 

-

 

-

 

(215,788)

 

215,788

 

-

 

-

 

-

Foreign currency translation differences for foreign operations

 

-

 

-

 

-

 

692,315

 

75,575

 

767,890

 

158,747

 

926,637

Other comprehensive income (loss) from associates

 

-

 

-

 

(85)

 

3,320

 

-

 

3,235

 

-

 

3,235

Total other comprehensive income (loss)

 

-

 

-

 

(131,920)

 

479,847

 

291,363

 

639,290

 

158,747

 

798,037

    Total comprehensive income (loss) for the year

W

-

 

-

 

(2,694,526)

 

479,847

 

291,363

 

(1,923,316)

 

312,053

 

(1,611,263)

Transaction with owners, recognized directly in equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital increase (Note 16)

 

710,921

 

569,893

 

-

 

-

 

-

 

1,280,814

 

 -

 

1,280,814

Acquisition of non-controlling shareholders' interests in subsidiaries

 

-

 

(47,419)

 

-

 

-

 

-

 

(47,419)

 

(183,850)

 

(231,269)

    Dividends to non-controlling shareholders in subsidiaries

 

-

 

-

 

-

 

-

 

-

 

-

 

(136,019)

 

(136,019)

    Total transaction with owners, recognized directly in equity

 

710,921

 

522,474

 

-

 

-

 

-

 

1,233,395

 

(319,869)

 

913,526

Balances at December 31, 2024

W

2,500,000

 

2,773,587

 

(18,512)

 

995,823

 

291,363

 

6,542,261

 

1,530,546

 

8,072,807

Balances at January 1, 2025

W

2,500,000

 

2,773,587

 

(18,512)

 

995,823

 

291,363

 

6,542,261

 

1,530,546

 

8,072,807

Total comprehensive income (loss) for the year

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit for the year

 

-

 

-

 

226,312

 

-

 

-

 

226,312

 

77,495

 

303,807

Other comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Remeasurements of net defined benefit liabilities

 

-

 

-

 

74,112

 

-

 

-

 

74,112

 

-

 

74,112

Foreign currency translation differences for foreign operations

 

-

 

-

 

-

 

83,306

 

(291,363)

 

(208,057)

 

23,627

 

(184,430)

Other comprehensive income from associates

 

-

 

-

 

-

 

2,272

 

-

 

2,272

 

-

 

2,272

Total other comprehensive income (loss)

 

-

 

-

 

74,112

 

85,578

 

(291,363)

 

(131,673)

 

23,627

 

(108,046)

    Total comprehensive income (loss) for the year

W

-

 

-

 

300,424

 

85,578

 

(291,363)

 

94,639

 

101,122

 

195,761

Transaction with owners, recognized directly in equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in scope of consolidation

 

-

 

(32,776)

 

-

 

-

 

-

 

(32,776)

 

(396,554)

 

(429,330)

Balances at December 31, 2025

W

2,500,000

 

2,740,811

 

281,912

 

1,081,401

 

-

 

6,604,124

 

1,235,114

 

7,839,238

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to the consolidated financial statements.

 

 

 

 

 

 

 

 

 

 

 

 

 

7

 

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

 

 

Consolidated Statements of Cash Flows

 

 

 

 

For the years ended December 31, 2025 and 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In millions of won)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note

 

2025

 

2024

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from (used in) operating activities:

 

 

 

 

 

 

  Cash generated from operations

 

28

W

3,169,950

 

3,373,456

  Income taxes paid

 

 

 

(161,462)

 

(139,782)

  Interest received

 

 

 

54,915

 

93,945

  Interest paid

 

 

 

(711,320)

　

(915,858)

Cash flows from operating activities

 

 

 

2,352,083

 

2,411,761

Cash flows from (used in) investing activities:

 

 

 

 

 

 

  Dividends received

 

 

 

1,930

 

200

  Increase in deposits in banks

 

 

 

(1,700)

 

(1,700)

  Proceeds from withdrawal of deposits in banks

 

 

 

1,700

 

921,995

  Acquisition of financial assets at fair value through profit or loss

 

 

 

(1,422)

 

(5,470)

  Proceeds from disposal of financial assets at fair value through profit or loss

 

 

 

4,275

 

5,301

Proceeds from disposal of investments in equity accounted investees

 

 

 

-

 

17,609

  Proceeds from disposal of assets held for sale

 

 

 

813,311

 

-

  Acquisition of property, plant and equipment

 

 

 

(1,347,937)

 

(2,129,735)

  Proceeds from disposal of property, plant and equipment

 

 

 

122,850

 

248,460

  Acquisition of intangible assets

 

 

 

(759,146)

 

(786,819)

  Proceeds from disposal of intangible assets

 

 

 

1,918

 

6,257

Proceeds from insurance payout

 

 

 

-

 

49,995

  Government grants received

 

 

 

1,041

 

2,307

  Proceeds from settlement of derivatives

 

 

 

157,984

 

274,173

  Decrease in short-term loans

 

 

 

21,558

 

19,697

  Increase in deposits

 

 

 

(4,405)

 

(2,036)

  Decrease in deposits

 

 

 

7,682

 

2,124

  Proceeds from disposal of greenhouse gas emission permits

 

 

 

1,742

 

14,394

Cash flows used in investing activities

 

 

 

(978,619)

 

(1,363,248)

Cash flows from (used in) financing activities:

 

28

 

 

 

 

  Proceeds from short-term borrowings

 

 

 

4,385,305

 

5,219,941

  Repayments of short-term borrowings

 

 

 

(4,502,811)

 

(6,285,819)

  Repayments of current portion of bonds

 

 

 

(612,000)

 

(370,000)

  Proceeds from long-term borrowings

 

 

 

4,919,708

 

2,912,552

Repayments of long-term borrowings

 

 

 

(245,735)

 

-

  Repayments of current portion of long-term borrowings

 

 

 

(5,808,062)

 

(3,638,904)

  Payments of lease liabilities

 

 

 

(52,902)

 

(71,008)

Repayments of security deposits received

 

 

 

(40,500)

 

-

  Capital increase

 

 

 

-

 

1,292,455

  Transaction cost from capital increase

 

 

 

-

 

(11,641)

Acquisition of non-controlling shareholders' interests in subsidiaries

 

 

 

-

 

(245,362)

  Dividends to non-controlling shareholders in subsidiaries

 

 

 

(6,390)

 

(136,519)

Cash flows used in financing activities

 

 

 

(1,963,387)

 

(1,334,305)

Net decrease in cash and cash equivalents

 

 

 

(589,923)

 

(285,792)

Cash and cash equivalents included in assets held for sale at January 1

 

 

 

158,415

 

-

Cash and cash equivalents at January 1

 

 

 

2,021,640

 

2,257,522

Effect of exchange rate fluctuations on cash held

 

 

 

(18,074)

 

208,325

Cash and cash equivalents included in assets held for sale at December 31

 

 

 

-

 

(158,415)

Cash and cash equivalents at December 31

 

 

W

1,572,058

 

2,021,640

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to the consolidated financial statements.

 

 

8

 

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

1.
Reporting Entity

 

(a)
Description of the Parent Company

 

LG Display Co., Ltd. (the "Parent Company") was incorporated in February 1985 and the Parent Company has been a public corporation listed on the Korea Exchange since 2004. The main business of the Parent Company and its subsidiaries (the “Group”) is to manufacture and sell displays and its related products. As of December 31, 2025, the Group operates Thin Film Transistor Liquid Crystal Display (“TFT-LCD”) and Organic Light Emitting Diode (“OLED”) panel manufacturing plants in Gumi, Paju and China and TFT-LCD and OLED module manufacturing plants in Gumi, Paju, China and Vietnam. The Parent Company is domiciled in the Republic of Korea with its address at 128 Yeoui-daero, Yeongdeungpo-gu, Seoul. As of December 31, 2025, LG Electronics Inc., a major shareholder of the Parent Company, owns 36.72% (183,593,206 shares) of the Parent Company’s common stock.

 

As of December 31, 2025, 500,000,000 shares of the Parent Company's common stock are listed on the Korea Exchange under the identifying code 034220, and 35,191,892 American Depositary Shares ("ADSs"; 2 ADSs represent one share of common stock) are listed on the New York Stock Exchange under the symbol "LPL".

 

 

9

 

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

1.
Reporting Entity, Continued

(b)
Consolidated Subsidiaries as of December 31, 2025

 

Subsidiaries

 

Location

 

Percentage of ownership(%)

 

Closing month

 

Date of

incorporation

 

Business

LG Display America, Inc.

 

San Jose, U.S.A.

 

100

 

December

 

September 24, 1999

 

Sales of display products

LG Display Germany GmbH

 

Eschborn, Germany

 

100

 

December

 

October 15, 1999

 

Sales of display products

LG Display Japan Co., Ltd.

 

Tokyo, Japan

 

100

 

December

 

October 12, 1999

 

Sales of display products

LG Display Taiwan Co., Ltd.

 

Taipei, Taiwan

 

100

 

December

 

April 12, 1999

 

Sales of display products

LG Display Nanjing Co., Ltd.

 

Nanjing, China

 

100

 

December

 

July 15, 2002

 

Production of display products

LG Display Shanghai Co., Ltd.

 

Shanghai, China

 

100

 

December

 

January 16, 2003

 

Sales of display products

LG Display Shenzhen Co., Ltd.

 

Shenzhen, China

 

100

 

December

 

July 27, 2007

 

Sales of display products

LG Display Singapore Pte. Ltd.

 

Singapore

 

100

 

December

 

November 4, 2008

 

Sales of display products

L&T Display Technology (Fujian) Limited

 

Fujian, China

 

51

 

December

 

December 7, 2009

 

Production and sales of LCD module and LCD monitor sets

LG Display Yantai Co., Ltd.

 

Yantai, China

 

100

 

December

 

March 17, 2010

 

Production of display products

Nanumnuri Co., Ltd.

 

Gumi, South Korea

 

100

 

December

 

March 21, 2012

 

Operation of welfare facilities

Unified Innovative Technology, LLC

 

Wilmington, U.S.A.

 

100

 

December

 

March 12, 2014

 

Intellectual property management

LG Display Guangzhou Trading Co., Ltd.

 

Guangzhou, China

 

100

 

December

 

April 28, 2015

 

Sales of display products

Global OLED Technology, LLC

 

Sterling, U.S.A.

 

100

 

December

 

December 18, 2009

 

OLED intellectual property management

LG Display Vietnam Haiphong Co., Ltd.

 

Haiphong, Vietnam

 

100

 

December

 

May 5, 2016

 

Production and sales of display products

Suzhou Lehui Display Co., Ltd.

 

Suzhou, China

 

100

 

December

 

July 1, 2016

 

Production and sales of LCD module and LCD monitor sets

LG DISPLAY FUND I LLC(*1)

 

Wilmington, U.S.A.

 

100

 

December

 

May 1, 2018

 

Investment in venture business and technologies

LG Display High-Tech (China) Co., Ltd.

 

Guangzhou, China

 

70

 

December

 

July 11, 2018

 

Production and sales of display products

(*1) For the year ended December 31, 2025, the Parent Company contributed W2,831 million in cash for the capital increase and recovery W2,018 million of LG DISPLAY FUND I LLC. There was no change in the Parent Company’s percentage of ownership in LG DISPLAY FUND I LLC as a result of this additional investment.

 

 

 

10

 

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

1.
Reporting Entity, Continued

(c)
Change in scope of Consolidation

 

For the year ended December 31, 2024, management of the Group decided to sell 80% of its stake in LG Display (China) Co., Ltd. and 100% of its stake in LG Display Guangzhou Co., Ltd. to TCL CSOT. The contract was signed on September 26, 2024, and the transaction was completed on April 1, 2025.

 

Subsidiaries

 

Location

 

Percentage of ownership(%)

 

Reason

LG Display Guangzhou Co., Ltd.

 

Guangzhou, China

 

100

 

Disposal

LG Display (China) Co., Ltd.

 

Guangzhou, China

 

80

 

Disposal

 

 

(d)
Summary of financial information (before the elimination of intercompany transactions) of subsidiaries as of and for the years ended December 31, 2025 and 2024 is as follows

 

(In millions of won)

 

December 31, 2025

 

2025

Subsidiaries

 

Total

assets

 

Total liabilities

 

Total shareholders’ equity

 

Sales

 

Net income

(loss)

LG Display America, Inc.

W

1,487,248

 

1,411,341

 

75,907

 

15,776,135

 

11,342

LG Display Germany GmbH

 

350,748

 

308,714

 

42,034

 

1,328,245

 

2,645

LG Display Japan Co., Ltd.

 

191,870

 

176,420

 

15,450

 

806,899

 

1,160

LG Display Taiwan Co., Ltd.

 

537,470

 

506,842

 

30,628

 

2,206,716

 

5,050

LG Display Nanjing Co., Ltd.

 

3,831,510

 

2,853,780

 

977,730

 

1,690,130

 

21,160

LG Display Shanghai Co., Ltd.

 

135,277

 

111,022

 

24,255

 

673,288

 

(2,669)

LG Display Shenzhen Co., Ltd.

 

37,974

 

30,370

 

7,604

 

215,839

 

(9,116)

LG Display Singapore Pte. Ltd.

 

2,466,916

 

2,452,730

 

14,186

 

1,588,784

 

(999)

L&T Display Technology (Fujian) Limited

 

302,144

 

190,668

 

111,476

 

796,514

 

6,464

LG Display Yantai Co., Ltd.

 

541,269

 

101,894

 

439,375

 

256,961

 

5,795

Nanumnuri Co., Ltd.

 

6,015

 

4,075

 

1,940

 

28,373

 

69

Unified Innovative Technology, LLC

 

546

 

1

 

545

 

-

 

(115)

LG Display Guangzhou Trading Co., Ltd.

 

3,577,488

 

3,483,152

 

94,336

 

385,484

 

4,897

Global OLED Technology, LLC

 

30,865

 

3,157

 

27,708

 

2,516

 

(1,003)

LG Display Vietnam Haiphong Co., Ltd.

 

5,630,201

 

3,611,689

 

2,018,512

 

3,795,193

 

298,757

Suzhou Lehui Display Co., Ltd.

 

208,225

 

50,538

 

157,687

 

306,693

 

3,958

LG DISPLAY FUND I LLC

 

98,043

 

4

 

98,039

 

-

 

2,298

LG Display High-Tech (China) Co., Ltd.

 

7,575,519

 

3,635,926

 

3,939,593

 

2,422,181

 

236,175

Total

W

27,009,328

 

18,932,323

 

8,077,005

 

32,279,951

 

585,868

 

 

11

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

1. Reporting Entity, Continued

 

(In millions of won)

 

December 31, 2024

 

2024

Subsidiaries

 

Total

assets

 

Total liabilities

 

Total shareholders’ equity

 

Sales

 

Net income

(loss)

LG Display America, Inc.

W

2,433,349

 

2,367,143

 

66,206

 

15,218,449

 

12,662

LG Display Germany GmbH

 

571,085

 

535,427

 

35,658

 

1,514,282

 

3,555

LG Display Japan Co., Ltd.

 

215,670

 

201,213

 

14,457

 

1,045,036

 

2,420

LG Display Taiwan Co., Ltd.

 

807,931

 

780,043

 

27,888

 

2,569,859

 

2,819

LG Display Nanjing Co., Ltd.

 

3,188,176

 

2,249,586

 

938,590

 

1,841,645

 

103,023

LG Display Shanghai Co., Ltd.

 

192,973

 

166,757

 

26,216

 

890,982

 

4,286

LG Display Guangzhou Co., Ltd.(*)

 

2,603,086

 

1,984,854

 

618,232

 

2,306,421

 

44,772

LG Display Shenzhen Co., Ltd.

 

117,986

 

101,622

 

16,364

 

589,537

 

2,818

LG Display Singapore Pte. Ltd.

 

3,570,065

 

3,554,525

 

15,540

 

1,442,304

 

(6,018)

L&T Display Technology (Fujian) Limited

 

345,309

 

242,376

 

102,933

 

851,228

 

18,251

LG Display Yantai Co., Ltd.

 

601,808

 

177,391

 

424,417

 

302,923

 

26,941

Nanumnuri Co., Ltd.

 

5,556

 

3,685

 

1,871

 

25,502

 

320

LG Display (China) Co., Ltd.(*)

 

2,237,053

 

276,308

 

1,960,745

 

1,477,381

 

46,621

Unified Innovative Technology, LLC

 

698

 

20

 

678

 

-

 

(523)

LG Display Guangzhou Trading Co., Ltd.

 

3,594,526

 

3,462,995

 

131,531

 

400,592

 

39,474

Global OLED Technology, LLC

 

32,998

 

3,512

 

29,486

 

1,312

 

(11,966)

LG Display Vietnam Haiphong Co., Ltd.

 

6,192,641

 

4,434,492

 

1,758,149

 

3,931,808

 

250,503

Suzhou Lehui Display Co., Ltd.

 

307,178

 

109,776

 

197,402

 

393,161

 

8,837

LG DISPLAY FUND I LLC

 

97,596

 

30

 

97,566

 

-

 

(3,164)

LG Display High-Tech (China) Co., Ltd.

 

7,630,921

 

4,000,109

 

3,630,812

 

2,482,999

 

432,402

Total

W

34,746,605

 

24,651,864

 

10,094,741

 

37,285,421

 

978,033

 

(*) For the year ended December 31, 2024, the contract to sell 80% of its stake in LG Display (China) Co., Ltd. and 100% of its stake in LG Display Guangzhou Co., Ltd. was signed. As a result, the assets and liabilities held by LG Display (China) Co., Ltd. and LG Display Guangzhou Co., Ltd. are presented as assets and liabilities held for sale.

 

12

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

1. Reporting Entity, Continued

 

(e) Information of subsidiaries (before elimination of intercompany transactions) which have material non-controlling interests as of and for the years ended December 31, 2025 and 2024 are as follows:

 

(In millions of won)

 

 

 

 

 

 

LG Display High-Tech(China) Co., Ltd.

 

 

2025

 

2024

Percentage of ownership in non-controlling interests(%)

 

30

 

30

Current assets

W

6,157,564

 

5,666,246

Non-current assets

 

1,417,955

 

1,964,675

Current liabilities

 

1,114,830

 

2,193,788

Non-current liabilities

 

2,521,096

 

1,806,321

Net assets

 

3,939,593

 

3,630,812

Book value of non-controlling interests

 

1,180,491

 

1,087,857

Revenue

W

2,422,181

 

2,482,999

Profit for the year

 

236,175

 

432,402

Profit attributable to non-controlling interests

 

70,853

 

129,721

Cash flows from operating activities

W

786,058

 

1,252,886

Cash flows used in investing activities

 

(514,457)

 

(1,290,367)

Cash flows used in financing activities

 

(180,756)

 

(213,400)

Effect of exchange rate fluctuations on cash and cash equivalents

 

4,682

 

19,378

Net increase(decrease) in cash and cash equivalents

 

95,527

 

(231,503)

Cash and cash equivalents at January 1

 

82,572

 

314,075

Cash and cash equivalents at December 31

 

178,099

 

82,572

 

13

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

2.
Basis of Presenting Financial Statements

 

(a)
Application of accounting standards

 

In accordance with the Act on External Audits of Stock Companies, Etc., these consolidated financial statements have been prepared in accordance with Korean International Financial Reporting Standards (“K-IFRS”).

 

The consolidated financial statements were authorized for issuance by the Board of Directors on January 27, 2026, which will be submitted for approval to the shareholders’ meeting to be held on March 19, 2026.

 

(b)
Basis of Measurement

 

The consolidated financial statements have been prepared on the historical cost basis except for the following material items in the consolidated statement of financial position:

 

▪
derivative financial instruments at fair value, financial assets at fair value through profit or loss (“FVTPL”), financial assets at fair value through other comprehensive income (“FVOCI”), financial liabilities at fair value through profit or loss (“FVTPL”), and
▪
net defined benefit liabilities (defined benefit assets) recognized at the present value of defined benefit obligations less the fair value of plan assets

 

(c)
Functional and Presentation Currency

 

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 each entity operates (the “functional currency"). The consolidated financial statements are presented in Korean won, which is the Parent Company’s functional and presentation currency.

 

(d)
Estimates and Judgments

 

As the resulting accounting estimates will, by definition, seldom equal the related actual results, it can contain a significant risk of causing a material adjustment.

 

Estimates and assumptions are continuously evaluated, taking into account future events that are reasonably predictable in light of past experiences and current situations. Changes in accounting estimates are recognized during the period which the estimates have been changed and the future periods to be affected.

14

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

2.
Basis of Presenting Financial Statements, Continued

 

(d)
Estimates and Judgments, Continued

 

The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. Additional information of significant judgment and assumptions of certain items are included in relevant notes.

 

(i)
Impairment of non-financial assets

 

The recoverable amount of a non-financial assets is determined as the greater of its value in use and its fair value less costs to sell.

 

(ii)
Income Tax

 

The Group’s taxable income generated from these operations are subject to income taxes based on tax laws and interpretations of tax authorities in numerous jurisdictions. There are many transactions and calculations for which the ultimate tax determination is uncertain. The Group estimates the income tax effects expected to be incurred in the future as a result of its operating activities up to the end of the reporting period, and recognizes them as current and deferred income taxes. However, the actual future income tax burden may not match the recognized related assets and liabilities, and such differences may affect the current and deferred income tax assets and liabilities at the time the expected income tax effects are realized.

 

In addition, deferred tax assets are recognized to the extent that it is probable that taxable income will be generated during the periods when temporary differences, unused tax losses, and tax credits are realized. Significant judgments are made to determine the book value of deferred tax assets that can be recognized based on the timing and level of future taxable income.

 

(iii)
Net defined benefit liabilities (defined benefit assets)

 

The present value of defined benefit obligations can vary depending on various factors determined by actuarial methods. The assumptions applied to determine the net cost (profit) of retirement benefits include the discount rate, which represents the interest rate that should be applied to determine the present value of the estimated future cash outflows expected to occur upon the settlement of defined benefit obligations. The discount rate is determined based on market yields of high-quality corporate bonds denominated in the currency in which the benefits are to be paid, taking into account the duration and maturity profile of the related pension obligations. Other key assumptions related to defined benefit obligations are based on current market conditions.

 

During the reporting period, the Group changed the discount rate calculation method among the actuarial assumptions for the projected unit credit method to more reasonably determine the defined benefit obligation. (see Note 13)

 

15

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

3.
Material Accounting Policies

 

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.


(a) Consolidation

 

(i)
Subsidiaries

 

Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed, or has right to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control is acquired until the date on which control is lost.

 

(ii)
Non-controlling interests

 

Non-controlling interests (“NCI”) are measured at their proportionate share of the acquiree’s identifiable net assets at the acquisition date. Profit or loss and other comprehensive income (loss) of subsidiaries are attributed to owners of the Parent Company and non-controlling interests.

 

Changes in the Group’s interest in subsidiaries that do not result in a loss of control are accounted for as equity transactions.

 

(iii)
Loss of Control

 

If the Parent Company loses control of subsidiaries, the Parent Company derecognizes the assets and liabilities of the former subsidiaries from the consolidated statement of financial position and recognizes the gain or loss associated with the loss of control attributable to the former controlling interest. Meanwhile, the Parent Company recognizes any investment retained in the former subsidiaries at its fair value when control is lost.

 

 

16

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

3. Material Accounting Policies, Continued

 

(a) Consolidation, Continued

 

(iv)
Associates and joint ventures

 

Associates are those entities in which the Group has significant influence, but not control or joint control, over the financial and operating policies. A joint venture is an arrangement in which the parties have joint control, whereby the parties have rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities.

 

Investments in associates and joint ventures are initially recognized at cost and subsequently accounted for using the equity method of accounting. The carrying amount of investments in associates and joint ventures is increased or decreased to recognize the Group's share of the profits or losses and changes in the Group's proportionate interest of the investee after the date of acquisition. Distributions received from an investee reduce the carrying amount of the investment.

 

If an associate or a joint venture uses accounting policies different from those of the Parent Company for like transactions and events in similar circumstances, appropriate adjustments are made to the consolidated financial statements. As of and during the periods presented in the consolidated financial statements, no adjustments were made in applying the equity method.

 

When the Group’s share of losses exceeds its interest in an equity accounted investee, the carrying amount of that interest, including any long-term investments, is reduced to nil, and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee.

 

(v)
Transactions eliminated on consolidation

 

Intra-group balances and transactions, including income and expenses and any unrealized income and expenses and balance of trade accounts and notes receivable and payable arising from intra-group transactions, are eliminated. Unrealized gains arising from transactions with equity accounted investees are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.

 

 

17

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

3. Material Accounting Policies, Continued

 

(b) Foreign Currency Translation

 

Transactions in foreign currencies are translated to the respective functional currencies of the Group entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated to the functional currency at the exchange rate at the end of each reporting period. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are translated to the functional currency at the exchange rate at the date that the fair value was determined. Foreign currency differences arising on translation are recognized in profit or loss, except for differences arising on an investment in equity instruments designated as at FVOCI and a financial asset and liability designated as a cash flow hedge, which are recognized in other comprehensive income. Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition are recognized in profit or loss in the period in which they arise. Foreign currency differences arising from assets and liabilities in relation to the investing and financing activities including borrowings, bonds and cash and cash equivalents are recognized in finance income (costs) in the consolidated statement of comprehensive income (loss) and foreign currency differences arising from assets and liabilities in relation to activities other than investing and financing activities are recognized in other non-operating income (expense) in the consolidated statement of comprehensive income (loss). Foreign currency differences are presented in gross amounts in the consolidated statement of comprehensive income (loss).

 

If the presentation currency of the Group is different from a foreign operation’s functional currency, the financial position and financial performance of the foreign operation are translated into the presentation currency using the following methods. The assets and liabilities of foreign operations, whose functional currency is not the currency of a hyperinflationary economy are translated to the Group’s functional currency at the exchange rates at the end of each reporting period. The income and expenses of foreign operations are translated to the Group’s functional currency at exchange rates at the dates of the transactions and foreign currency differences are recognized in other comprehensive income (loss). Relevant proportionate shares of foreign currency differences are allocated to the controlling interests and non-controlling interests. When a foreign operation is disposed of in its entirety or partially such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. If the Group disposes part of its interest in a subsidiary but retains control, then the relevant proportion of the cumulative amount is reattributed to NCI. When the Group disposes of only part of an associate or joint venture while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

 

Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition of that foreign operation is treated as assets and liabilities of the foreign operation. Thus, they are expressed in the functional currency of the foreign operation and translated at closing rate.

18

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

3. Material Accounting Policies, Continued

 

(c) Cash and cash equivalents

 

Cash and cash equivalents include all cash balances and short-term highly liquid investments with an original maturity of three months or less that are readily convertible into known amounts of cash.

 

(d) Inventories

 

Inventories are measured at the lower of cost and net realizable value. The cost of inventories is based on the weighted-average method, and includes expenditures incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated selling expenses. In the case of manufactured inventories and work-in-process, cost includes an appropriate share of production overheads based on the actual capacity of production facilities. However, the normal capacity is used for the allocation of fixed production overheads if the actual level of production is lower than the normal capacity.

 

(e) Financial Instruments

 

(i) Non-derivative financial assets

 

Recognition and initial measurement

 

Trade receivables and debt instruments issued are initially recognized when they are originated. All other financial assets are recognized in statement of financial position when, and only when, the Group becomes a party to the contractual provisions of the instrument.

 

A financial asset (unless it is a trade receivable without a significant financing component) is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

 

Classification and subsequent measurement

 

i) Financial assets

On initial recognition, a financial asset is classified as measured at: financial assets at amortized cost; financial assets at FVOCI; financial assets at FVTPL. Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the subsequent reporting period following the change in the business model.

 

A financial asset is measured as at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

 

-
it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
-
its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

 

19

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

3. Material Accounting Policies, Continued

 

(e) Financial Instruments, Continued

 

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

 

-
it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
-
the contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

 

For investments in equity instruments that are not held for trading, this will depend on whether the Group has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income.

 

All financial assets not classified as measured at amortized cost or FVOCI as described above are measured as at FVTPL. This includes all derivative financial assets. At initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortized cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

 

ii) Financial assets: business model

 

The Group makes an assessment of the objective of the business model in which a financial asset is held at a portfolio level because this best reflects the way the business is managed and information is provided to management. The information considered includes:

 

-
the stated policies and objectives for the portfolio and the operation of those policies in practice (these include whether management’s strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realizing cash flows through the sale of the assets);
-
how the performance of the portfolio is evaluated and reported to the Group’s management;
-
the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed; and
-
the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.

 

Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sale for this purpose.

 

A financial asset that is held for trading or is managed and whose performance is evaluated on a fair value basis is measured at FVTPL.

 

20

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

3. Material Accounting Policies, Continued

 

(e) Financial Instruments, Continued

 

iii) Financial assets: Assessment whether contractual cash flows are solely payments of principal and interest

 

For the purpose of the assessment, “principal” is defined as the fair value of the financial asset on initial recognition. ‘Interest’ is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and cost (e.g. liquidity risk and administrative costs), as well as profit margin.

 

In assessing whether the contractual cash flows are solely payments of principal and interest, the Group considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, the Group considers:

 

-
contingent events that would change the amount or timing of cash flows:
-
terms that may adjust the contractual coupon rate, including variable-rate features;
-
prepayment and extension features; and
-
terms that limit the Group’s claim to cash flows from specified assets (e.g. non-recourse features)

 

A prepayment feature is consistent with the solely payments of principal and interest criterion if the prepayment amount substantially represents unpaid amounts of principal and interest or the principal amount outstanding, which may include reasonable additional compensation for early termination of the contract.

 

Additionally, for a financial asset acquired at a discount or premium to its contractual par amount, a feature that permits or requires prepayment at an amount that substantially represents the contractual par amount plus accrued but unpaid contractual interest (which may also include reasonable additional compensation for early termination) is treated as consistent with this criterion if the fair value of the prepayment feature is insignificant at initial recognition.

 

iv) Financial assets: Subsequent measurement and gains and losses

 

Financial assets at FVTPL

 

These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.

Financial assets at amortized cost

 

These assets are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

Debt investments at FVOCI

 

These assets are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are recognized in OCI. On derecognition, gains and losses accumulated in OCI are reclassified to profit or loss.

 

21

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

3. Material Accounting Policies, Continued

 

(e) Financial Instruments, Continued

 

Derecognition

 

The Group derecognizes a financial asset when the contractual rights to the cash flows from the asset expire or when it transfers the rights to receive the contractual cash flows in a transaction in which substantially all the risks and rewards of ownership are transferred. In addition, if the Group neither transfers nor retains substantially all the risks and rewards of ownership of a transferred asset, it derecognizes the asset when it does not retain control of the asset.

 

If the Group has retained substantially all the risks and rewards of ownership of the transferred asset, the Group continues to recognize the transferred asset.

 

(ii) Non-derivative financial liabilities

 

The Group classifies financial liabilities into two categories, financial liabilities at FVTPL and other financial liabilities in accordance with the substance of the contractual arrangement and the definitions of financial liabilities, and recognizes them in the consolidated statement of financial position when the Group becomes a party to the contractual provisions of the instrument.

 

Financial liabilities at FVTPL include financial liabilities held for trading and designated as such upon initial recognition at FVTPL. After initial recognition, financial liabilities at FVTPL are measured at fair value, and changes therein are recognized in profit or loss. Upon initial recognition, transaction costs that are directly attributable to the issuance of financial liabilities are recognized in profit or loss as incurred.

 

Non-derivative financial liabilities other than financial liabilities classified as at FVTPL are classified as other financial liabilities and measured initially at fair value minus transaction costs that are directly attributable to the issuance of financial liabilities. Subsequent to initial recognition, these financial liabilities are measured at amortized cost using the effective interest method. As of December 31, 2025, non-derivative financial liabilities consist of borrowings, bonds, trade accounts and notes payable, other accounts payable and others.

 

The Group derecognizes a financial liability when its contractual obligations are discharged, cancelled or expired.

 

22

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

3. Material Accounting Policies, Continued

 

(e) Financial Instruments, Continued

 

(iii) Derivative financial instruments

 

Derivatives are initially recognized at fair value. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are accounted for as described below.

 

Hedge Accounting

 

If necessary, the Group designates derivatives as hedging items to hedge the risk of changes in the fair value of assets, liabilities or firm commitments (a fair value hedge) and foreign currency risk of highly probable forecasted transactions or firm commitments (a cash flow hedge).

 

On initial designation of the hedge, the Group’s management formally designates and documents the relationship between the hedging instrument(s) and hedged item(s), including the risk management objectives and strategy in undertaking the hedge transaction, together with the methods that will be used to assess the effectiveness of the hedging relationship, both at the inception of the hedge relationship as well as on an ongoing basis.

 

i) Fair value hedges

 

Change in the fair value of a derivative hedging instrument designated as a fair value hedge and the hedged item is recognized in profit or loss, respectively. The gain or loss from remeasuring the hedging instrument at fair value and the gain or loss on the hedged item attributable to the hedged risk are recognized in profit or loss in the same line item of the statement of comprehensive income (loss). The Group discontinues fair value hedge accounting if the hedging instrument expires or is sold, terminated or exercised; or if the hedge no longer meets the criteria for hedge accounting.

 

23

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

3. Material Accounting Policies, Continued

 

(e) Financial Instruments, Continued

 

ii) Cash flow hedges

 

When a derivative designated as a cash flow hedging instrument meets the criteria of cash flow hedge accounting, the effective portion of changes in the fair value of the derivative is recognized in other comprehensive income and the ineffective portion of changes in the fair value of the derivative is recognized in profit or loss. The Group discontinues cash flow hedge accounting if the hedging instruments expires or is sold, terminated or exercised; or if the hedge no longer meets the criteria for hedge accounting. The cumulative gain or loss on the hedging instrument that has been recognized in other comprehensive income is reclassified to profit or loss in the periods during which the forecasted transaction occurs. If the forecasted transaction is no longer expected to occur, then the balance in other comprehensive income is recognized immediately in profit or loss.

 

Embedded derivative

 

Embedded derivatives are separated from the host contract and accounted for separately if the host contract is not a financial asset and certain criteria are met.

 

Other derivative financial instruments

 

Other derivative financial instruments are measured at fair value and changes of their fair value are recognized in profit or loss.

 

(iv) Financial guarantee agreement

 

A financial guarantee agreement is a contract in which a certain amount of money must be paid to compensate for the loss incurred by the holder due to the failure of a particular debtor to pay on the due date in accordance with the terms of the original contract or the changed terms of the debt product. Financial guarantee contracts are measured at fair value at the time of initial recognition, and after initial recognition, they are measured by the higher of the following and displayed as 'Financial Liabilities' in the consolidated statement of financial position.

- The amount determined in accordance with the expected credit loss model

- The amount initially recognized less, where appropriate, the cumulative amount of income recognized in accordance with Korean IFRS 1115 Revenue from Contracts with Customers

 

(f) Property, Plant and Equipment

 

(i) Recognition and measurement

 

Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. Cost includes an expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labor, any costs directly attributable to bringing the assets to a working condition for their intended use, the costs of dismantling and removing the items and restoring the site on which they are located and borrowing costs on qualifying assets.

 

The gain or loss arising from the derecognition of an item of property, plant and equipment is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item and recognized in other non-operating income or other non-operating expenses.

24

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

3. Material Accounting Policies, Continued

 

(f) Property, Plant and Equipment, Continued

 

(ii) Subsequent costs

 

Subsequent expenditure on an item of property, plant and equipment is recognized as part of its cost only if it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The costs of the day-to-day servicing of property, plant and equipment are recognized in profit or loss as incurred.

 

(iii) Depreciation

 

Land is not depreciated and depreciation of other items of property, plant and equipment is recognized in profit or loss on a straight-line basis, reflecting the pattern in which the asset's future economic benefits are expected to be consumed by the Group. The residual value of property, plant and equipment is zero.

 

Typical estimated useful lives of the assets are as follows:

 

 

Typical estimated useful lives (years)

Buildings and structures

20~40

Machinery

4, 5

Furniture and fixtures

4

Equipment, tools and vehicles

2, 4, 12

Right-of-use assets

(*)

 

 

 

 

 

 

 

(*) The Group depreciates the right-of-use assets from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term.

 

Depreciation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate and any changes are accounted for as changes in accounting estimates.

 

(g) Borrowing Costs

 

The Group capitalizes borrowing costs, which includes interests and exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs, directly attributable to the acquisition, construction or production of a qualifying asset as part of the cost of that asset. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale. To the extent that the borrowings are directly attributable to the purpose of obtaining a qualifying asset, the Group determines the amount of borrowing costs eligible for capitalization as the actual borrowing costs incurred on that borrowing during the period less any investment income on the temporary investment of those borrowings. The Group immediately recognizes other borrowing costs as an expense.

25

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

3. Material Accounting Policies, Continued

 

(h) Government Grants

 

In case there is reasonable assurance that the Group will comply with the conditions attached to a government grant, the government grant is recognized as follows:

 

(i) Grants related to the purchase or construction of assets

 

A government grant related to the purchase or construction of assets is deducted in calculating the carrying amount of the asset. The grant is recognized in profit or loss over the life of a depreciable asset as a reduced depreciation expense and cash related to grant received is presented in investing activities in the statement of cash flows.

 

(ii) Grants for compensating the Group’s expenses incurred

 

A government grant that compensates the Group for expenses incurred is recognized in profit or loss as a deduction from relevant expenses on a systematic basis in the periods in which the expenses are recognized.

 

(iii) Other government grants

 

A government grant that becomes receivable for the purpose of giving immediate financial support to the Group with no compensation for expenses or losses already incurred or no future related costs is recognized as other non-operating income of the period in which it becomes receivable.

 

(i) Intangible Assets

 

Intangible assets are initially measured at cost. Subsequently, intangible assets are measured at cost less accumulated amortization and accumulated impairment losses.

 

(i) Goodwill

Goodwill arising from business combinations is recognized as the excess of the acquisition cost of a business over the net fair value of the identifiable assets acquired and liabilities assumed. Any deficit is a bargain purchase that is recognized in profit or loss. Goodwill is not amortized and is measured at cost less accumulated impairment losses.

 

(ii) Research and development

 

Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognized in profit or loss as incurred. Development activities involve a plan or design of the production of new or substantially improved products and processes. Development expenditure is capitalized as intangible assets only if the Group can demonstrate all of the following:

26

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

3. Material Accounting Policies, Continued

 

(i) Intangible Assets, Continued

 

-
the technical feasibility of completing the intangible asset so that it will be available for use or sale,
-
its intention to complete the intangible asset and use or sell it,
-
its ability to use or sell the intangible asset,
-
how the intangible asset will generate probable future economic benefits (among other things, the Group can demonstrate the usefulness of the intangible asset by existence of a market for the output of the intangible asset or the intangible asset itself if it is to be used internally),
-
the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset, and
-
its ability to measure reliably the expenditure attributable to the intangible asset during its development.

 

Development projects are divided into research activities and development activities. Expenditures on research activities are recognized in profit or loss and qualifying development expenditures on development activities are capitalized.

 

The expenditure capitalized includes the cost of materials, direct labor and overhead costs that are directly attributable to preparing the asset for its intended use and borrowing costs on qualifying assets.

 

(iii) Other intangible assets

 

Other intangible assets include intellectual property rights, software, customer relationships, technology, memberships and others. The Group currently has a number of patent license agreements related to product production. When the amount of payments is determined, it is recognized as intangible assets as intellectual property rights and other account payables, respectively, and the intangible assets are amortized on a straight-line basis over the patent license period.

 

(iv) Subsequent costs

 

Subsequent expenditures are capitalized only when they increase the future economic benefits embodied in the specific intangible asset to which they relate. All other expenditures, including expenditures on internally generated goodwill and brands, are recognized in profit or loss as incurred.

 

(v) Amortization

 

Amortization is calculated on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use. The residual value of intangible assets is zero. However, as there are no foreseeable limits to the periods over which condominium and golf club memberships are expected to be available for use, these intangible assets are regarded as having indefinite useful lives and not amortized.

27

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

3. Material Accounting Policies, Continued

 

(i) Intangible Assets, Continued

 

Typical estimated useful lives of the intangible assets are as follows:

 

 

Typical estimated useful lives (years)

Intellectual property rights

5, 10, (*1)

Software

4, (*1)

Technology

10

Development costs

(*2)

Condominium and golf club memberships

Indefinite

 

(*1) Patent royalty (included in intellectual property rights) and software license are amortized over the useful lives considering the contract period.

 

(*2) Capitalized development costs are amortized over the useful lives considering the life cycle of the developed products.

 

Amortization periods and the amortization methods for intangible assets with finite useful lives are reviewed at each financial year-end. The useful lives of intangible assets with indefinite useful lives are reviewed at each financial year-end to determine whether events and circumstances continue to support indefinite useful life assessments for those assets. If appropriate, the changes are accounted for as changes in accounting estimates.

 

(j) Investment Property

 

Property held to earn rentals or for capital appreciation or both is classified as investment property. Investment properties are initially measured at cost, including transaction costs incurred at the time of acquisition, and subsequently, measured at cost less accumulated depreciation and accumulated impairment loss.

 

Subsequent expenditure on an item of investment property is recognized as part of its cost only if it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of those parts that are replaced is derecognized. All other subsequent expenditures are expensed in the period in which it is incurred.

 

Among investment properties, land is not depreciated, and investment properties except land are depreciated on a straight-line basis by applying 20 years of the building according to the economic depreciation period. Depreciation methods, useful lives and residual values of investment properties are reviewed at each reporting period-end and if appropriate, the changes are accounted for as changes in accounting estimates.

28

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

3. Material Accounting Policies, Continued

(k) Impairment

(i) Financial assets

 

Financial instruments and contract assets

 

The Group recognizes loss allowance for financial assets measured at amortized cost and debt investments at FVOCI at the ‘expected credit loss’ (ECL).

 

The Group recognizes a loss allowance for the life-time expected credit losses except for following, which are measured at 12-month ECLs:

 

-
debt instruments that are determined to have low credit risk at the reporting date; and
-
other debt instruments and bank deposits for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

 

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both qualitative and quantitative information and analysis, based on the Group’s historical experience and informed credit assessment including forward-looking information.

 

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.

 

12-month ECLs are the portion of the ECLs that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

 

The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk.

 

29

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

3. Material Accounting Policies, Continued

 

(k) Impairment, Continued

 

Estimation of expected credit losses

 

Expected credit losses are a probability-weighted estimate of credit losses. Credit losses are measured using the present value of the difference between the contractual cash flows and the expected contractual cash flows. The expected credit losses are discounted using effective interest rate of the financial assets.

 

Credit-impaired financial assets

 

At each reporting period-end, the Group assesses whether financial assets carried at amortized cost and debt instruments at FVOCI are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

 

Evidence that a financial asset is credit-impaired includes the following observable data:

 

-
significant financial difficulty of the issuer or the borrower;
-
the lender(s) of the borrower, for economic or contractual reasons relating to the borrower’s financial difficulty, having granted to the borrower a concession(s) that the lender(s) would not otherwise consider;
-
it is probable that the borrower will enter bankruptcy or other financial reorganization; or
-
the disappearance of an active market for a security because of financial difficulties.

 

Presentation of loss allowance for ECL in the consolidated statement of financial position

 

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets. For debt instruments at FVOCI, the loss allowance is charged to profit or loss and is recognized in OCI instead of reducing the carrying amount of financial assets in the consolidated statement of financial position.

 

Write-off

 

The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations for recovering the financial asset in its entirety or a portion thereof. The Group assess whether there are reasonable expectations of recovering the contractual cash flows from customers and individually assess the timing and amount of write-off. The Group expects no significant recovery from the amount written-off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Group’s procedures for recovery of amounts due.

 

30

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

3. Material Accounting Policies, Continued

 

(k) Impairment, Continued

 

(ii) Non-financial assets

 

The carrying amounts of the Group’s non-financial assets, other than assets arising from employee benefits, inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. For goodwill, and intangible assets that have indefinite useful lives or that are not yet available for use, irrespective of whether there is any indication of impairment, the recoverable amount is estimated each year.

 

Recoverable amount is estimated for the individual asset. If it is not possible to estimate the recoverable amount of the individual asset, the Group determines the recoverable amount of the cash‑generating unit to which the asset belongs. The cash‑generating unit (“CGU”) is the smallest group of assets that includes the asset and generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. In identifying whether cash inflows from an asset or group of assets are largely independent of the cash inflows from other assets or groups of assets, the Group considers various factors including how management monitors the entity’s operations or how management makes decisions about continuing or disposing of the entity’s assets and operations. Parent Company’s cash-generating units consist of Display CGU, Display (Large OLED) CGU and Display (AD PO) CGU. Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination. The recoverable amount of an asset or cash-generating unit is determined as the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. Fair value less costs to sell is based on the best information available to reflect the amount that the Group could obtain from the disposal of the asset in an arm's length transaction between knowledgeable, willing parties, after deducting the costs of disposal.

 

An impairment loss is recognized if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. Impairment losses are recognized in profit or loss. Impairment losses recognized in respect of a CGU are allocated first to reduce the carrying amount of any goodwill allocated to the unit, and then to reduce the carrying amounts of the other assets in the unit on a pro rata basis.

 

In respect of assets other than goodwill, impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of accumulated depreciation or amortization, if no impairment loss had been recognized from the acquisition cost. An impairment loss in respect of goodwill is not reversed.

 

31

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

3. Material Accounting Policies, Continued

 

(l) Leases

 

A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

 

(i) As a lessee

 

At commencement or on modification of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease and non-lease component on the basis of its relative stand-alone price. For certain leases, the Group accounts for the lease and non-lease components as a single lease component by applying the practical expedient not to separate non-lease components.

 

The Group recognizes a right-of-use asset and lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located less any lease incentives received.

 

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In that case, the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

 

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.

 

The Group determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased.

 

 

Lease payments included in the measurement of the lease liability comprise the following:

 

- fixed payments, including in-substance fixed payments;

- variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

- amounts expected to be payable under a residual value guarantee; and

- the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Group is reasonably certain not to terminate early.

 

 

32

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

3. Material Accounting Policies, Continued

 

(l) Leases, Continued

 

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee, if the Group changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.

 

When the lease liability is remeasured, the Group recognizes the amount of the remeasurement of the lease liability as an adjustment to the right-of-use asset. However, if the carrying amount of the right-of-use asset is reduced to zero and there is a further reduction in the measurement of the lease liability, the Group recognizes any remaining amount of the remeasurement in profit or loss.

 

The Group presents right-of-use assets that do not meet the definition of investment property in ‘property, plant and equipment’ and lease liabilities in ‘financial liabilities’ in the consolidated statement of financial position.

 

The Group has elected not to recognize right-of-use assets and lease liabilities for leases of low-value assets and short-term leases. The Group recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

 

(ii) As a lessor

 

When the Group acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating lease.

 

To classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. If the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset, then the lease is a finance lease; if not, then it is an operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Group applies the exemption described above, then it classifies the sub-lease as an operating lease.

 

Contracts may contain both lease and non-lease components. The Group allocates the consideration in the contract to the lease and non-lease components based on their relative stand-alone prices.

 

At the commencement date, the Group recognizes assets held under a finance lease in its consolidated statement of financial position and present them as a receivable at an amount equal to the net investment in the lease and recognize finance income over the lease term, based on a pattern reflecting a constant periodic rate of return on the lessor’s net investment in the lease.

 

The Group recognizes lease payments received under operating leases as income on a straight-line basis over the lease term as part of ‘other revenue’.

 

 

33

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

3. Material Accounting Policies, Continued

 

(m) Provisions

 

A provision is recognized as a result of a past event, if the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.

 

The risks and uncertainties that inevitably surround events and circumstances are taken into account in reaching the best estimate of a provision. Where the effect of the time value of money is material, provisions are determined at the present value of the expected future cash flows. The unwinding of the discount is recognized as finance cost.

 

Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation, the provision is reversed.

 

The Group recognizes a liability for warranty obligations based on the estimated costs expected to be incurred under its basic limited warranty. This warranty covers defective products and is normally applicable for a warranty period from the date of purchase. These liabilities are accrued when product revenues are recognized. Factors that affect the Group’s warranty liability include historical and anticipated rates of warranty claims on those repairs and cost per claim to satisfy the Group’s warranty obligation. Warranty costs primarily include raw materials and labor costs. As these factors are impacted by actual experience and future expectations, management periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary. Accrued warranty obligations are included in the current and non-current provisions.

 

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources, are recorded when it is probable that a liability has been incurred and the amount of the assessment and/or remediation can be reasonably estimated.

 

(n) Non-current Assets (liabilities) Held for Sale

 

Non-current assets, or disposal groups comprising assets and liabilities, are classified as held-for-sale if it is highly probable that they will be recovered primarily from sale rather than through continuing use. In order to be classified as held for sale, the asset (or disposal group) is available for immediate sale in its present condition and its sale is highly probable. The assets (or disposal groups) that are classified as non-current assets (liabilities) held for sale are measured at the lower of their carrying amount and fair value less costs to sell on initial classification. The Group recognizes an impairment loss for any subsequent decrease in fair value of the asset (or disposal group) for which an impairment loss was recognized on initial classification as held-for-sale and a gain for any subsequent increase in fair value in profit or losses, up to the cumulative impairment loss previously recognized.

 

The Group does not depreciate a non-current asset while it is classified as held for sale or while it is part of a disposal group classified as held for sale.

 

34

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

3. Material Accounting Policies, Continued

 

(o) Employee Benefits

 

(i) Short-term employee benefits

 

Short-term employee benefits that are due to be settled within twelve months after the end of the period in which the employees render the related service are recognized in profit or loss on an undiscounted basis. The expected cost of profit-sharing and bonus plans and others are recognized when the Group has a present legal or constructive obligation to make payments as a result of past events and a reliable estimate of the obligation can be made.

 

(ii) Other long-term employee benefits

 

The Group’s net obligation in respect of long-term employee benefits other than pension plans is the amount of future benefit that employees have earned in return for their service in the current and prior periods.

 

(iii) Defined contribution plan

 

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognized as an employee benefit expense in profit or loss in the period during which services are rendered by employees.

(iv) Defined benefit plan

 

A defined benefit plan is a post-employment benefit plan other than a defined contribution plan, and the Group recognizes a net defined benefit liability by deducting the fair value of plan assets from the present value of the defined benefit obligation as of the reporting date.

 

The calculation is performed annually by an independent actuary using the projected unit credit method. The present value of the defined benefit obligation is measured by discounting the estimated future benefit payments using market yields on high-quality corporate bonds denominated in the currency in which the benefits are to be paid, taking into account the timing and maturity profile of the expected benefit payments. The Group recognizes remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions related to the defined benefit plans in other comprehensive income and transfers immediately to retained earnings.

 

The Group determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset), taking into account any changes in the net defined benefit liability (asset) during the period as a result of contributions and benefit payments. Consequently, the net interest on the net defined benefit liability (asset) includes the following components: interest cost on the defined benefit obligation, interest income on plan assets, and interest on the effect of the asset ceiling.

 

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Group recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

 

35

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

3. Material Accounting Policies, Continued

 

(o) Employee Benefits, Continued

 

(v) Termination benefits

 

The Group recognizes expense for termination benefits at the earlier of the date when the entity can no longer withdraw the offer of those benefits and when the entity recognizes costs for a restructuring involving the payment of termination benefits. If the termination benefits are not expected to be settled wholly before twelve months after the end of the annual reporting period, the Group measures the termination benefit with present value of future cash payments.

 

(p) Revenue from contracts with customers

 

Revenue from the sale of goods in the course of ordinary activities is measured at the fair value of the consideration received or receivable, net of estimated returns, trade discounts, volume rebates and other cash incentives paid to customers.

 

The Group recognizes revenue according to the five stage revenue recognition model (①Identifying the contract→② Identifying performance obligations →③ Determining transaction price→④ Allocating the transaction price to performance obligations →⑤ Recognizing revenue for performance obligations).

 

The Group generates revenue primarily from sale of display panels. Product revenue is recognized when a customer obtains control over the Group’s products, which typically occurs upon shipment or delivery depending on the terms of the contracts with the customer.

 

The Group includes return option in the sales contract of display panels with its customers and the consideration receivable from the customer is subject to change due to returns. The Group estimates an amount of variable consideration by using the expected value method with which the Group expects to better predict the amount of consideration. The Group includes in the transaction price an amount of variable consideration estimated only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur during the return period when the uncertainty associated with the variable consideration is subsequently resolved. The Group recognizes a refund liability and an asset for its right to recover products from customers if the Group receives consideration from a customer and expects to refund some or all of that consideration to the customer. Sales taxes or value-added taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and are excluded from revenues in the consolidated statement of comprehensive income (loss).

 

(q) Operating Segments

 

An operating segment is a component of the Group that: 1) engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with other components of the group, 2) whose operating results are reviewed regularly by the Group’s chief operating decision maker (“CODM”) in order to allocate resources and assess its performance, and 3) for which discrete financial information is available. Management has determined that the CODM of the Group is the Board of Directors. The CODM does not receive and therefore does not review discrete financial information for any component of the Group. Consequently, no operating segment information is included in these consolidated financial statements. Entity wide disclosures of geographic and product revenue information are provided in Note 18 to these consolidated financial statements.

 

36

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

3. Material Accounting Policies, Continued

 

(r) Finance Income and Finance Costs

 

Finance income includes interest income on funds invested (including debt instruments measured at FVOCI), dividend income, gains on disposal of debt instruments measured at FVOCI and changes in fair value of financial instruments at FVTPL. Interest income is recognized as it accrues in profit or loss, using the effective interest method. Dividend income is recognized in profit or loss on the date that the Group’s right to receive payment is established.

 

Finance costs include interest expense on borrowings, unwinding of the discount on provisions, gain and losses from financial instruments measured at FVTPL and impairment losses recognized on financial assets. Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of that asset.

 

(s) Income Tax

 

Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognized in profit or loss except to the extent that it relates to a business combination, or items recognized directly in equity or in other comprehensive income.

 

(i) Current tax

 

Current tax comprises the expected tax payable or receivable on the taxable profit or loss for the year, using tax rates enacted or substantively enacted at the reporting date and any adjustment to tax payable in respect of previous years. The amount of prepaid income tax and income tax payable is the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. The taxable profit is different from the accounting profit for the period since the taxable profit is calculated excluding the temporary differences, which will be taxable or deductible in determining taxable profit (tax loss) of future periods, and non-taxable or non-deductible items from the accounting profit.

 

(ii) Deferred tax

 

Deferred tax is recognized, using the asset and liability method, in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and deferred tax assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

 

37

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

3. Material Accounting Policies, Continued

 

(s) Income Tax, Continued

 

The Group recognizes a deferred tax liability for all taxable temporary differences associated with investments in subsidiaries and associates, except to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future. A deferred tax asset is recognized for all deductible temporary differences to the extent that it is probable that the differences relating to investments in subsidiaries, associates and joint ventures will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilized.

 

The Group reviews the carrying amount of deferred tax assets at the end of each reporting period, considering the likelihood of generating taxable income against which temporary differences, unused tax loss carryforwards, and tax credit carryforwards can be utilized. The potential taxable income is estimated based on business plans approved by management, historical experience of taxable income estimates, and tax policies including the transfer pricing of the Group. Additionally, future taxable income includes the anticipated permanent differences, considering the realization effect of temporary differences consistent with the business plan and the dividend policy of the Group. The Group recognizes deferred tax assets to the extent that it is probable that sufficient taxable income will be generated in the future, or there are sufficient taxable temporary differences available to utilize unused tax losses, etc.

 

The Group offsets deferred tax assets and deferred tax liabilities if, and only if the Group has a legally enforceable right to set off current tax assets against current tax liabilities and the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realize the assets and settle the liabilities simultaneously.

 

(t) Earnings Per Share

 

The Parent Company presents basic and diluted earnings per share (“EPS”) data for its common shares in the statements of comprehensive income. Basic EPS is calculated by dividing the profit or loss attributable to common shareholders of the Parent Company by the weighted average number of common shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to common shareholders and the weighted average number of common shares outstanding, adjusted for the effects of all dilutive potential common shares such as convertible bonds and others.

 

(u) Accounting standards and Interpretation issued and adopted by the Group

 

The Group has applied the following standards and amendments for the first time for their annual reporting period commencing January 1, 2025.

38

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

3. Material Accounting Policies, Continued

 

(u) Accounting standards and Interpretation issued and adopted by the Group, Continued

 

(i)
Amendments to Korean IFRS 1021 Effect of Exchange Rate Fluctuations, Amendments to Korean IFRS 1101 First Adoption of International Generally Accepted Accounting Principles Adopted by Korea - Lack of exchangeability

 

The amendment requires the entity to disclose the relevant information when an entity estimates a spot exchange rate because the exchangeability between two currencies is lacking. The amendments do not have a significant impact on the consolidated financial statements.

 

(v) New standards and interpretations not yet adopted by the Group

 

The following new accounting standards and interpretations have been published that are not mandatory for December 31, 2025 reporting periods and have not been early adopted by the Group.

 

(i)
Amendments to Korean IFRS 1109 Financial Instruments, Amendments to Korean IFRS 1107 Financial Instruments: Disclosure

 

Korean IFRS 1109 Financial Instruments and Korean IFRS 1107 Financial Instruments: Disclosures have been amended to respond to recent questions arising in practice, and to include new requirements. The amendments should be applied for annual periods beginning on or after January 1, 2026, and earlier application is permitted. The Group is currently reviewing the impact of the amendment on the consolidated financial statements.

 

-
Clarify the date of recognition and derecognition of some financial assets and liabilities, with a new exception for some financial liabilities settled through an electronic cash transfer system
-
Clarify and add further guidance for assessing whether a financial asset meets the solely payments of principal and interest (SPPI) criterion
-
Add new disclosures of impact on the entity and the extent to which the entity is exposed for each type of financial instruments if the timing or amount of contractual cash flow changes due to amendment of contract term
-
Update the disclosures for equity instruments designated at fair value through other comprehensive income (FVOCI)

 

(ii)
Annual Improvement to Korean IFRS - Volume 11

 

Annual Improvements to Korean IFRS - Volume 11 should be applied for annual periods beginning on or after January 1, 2026, and earlier application is permitted. The Group does not expect the amendments to have a significant impact on the consolidated financial statements.

 

-
Korean IFRS 1101 First-time Adoption of International Financial Reporting Standards: Hedge accounting by a first-time adopter
-
Korean IFRS 1107 Financial Instruments: Disclosures: Gain or loss on derecognition and implementation guidance
-
Korean IFRS 1109 Financial Instruments: Derecognition of lease liabilities and definition of transaction price
-
Korean IFRS 1110 Consolidated Financial Statements: Determination of a ‘de facto agent’
-
Korean IFRS 1007 Statement of Cash Flows: Cost method

 

39

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

3. Material Accounting Policies, Continued

 

(v) New standards and interpretations not yet adopted by the Group, Continued

 

(iii)
Amendments to Korean IFRS 1109 Financial Instruments, Amendments to Korean IFRS 1107 Financial Instruments: Disclosure – nature-dependent electricity contracts

 

Contracts referencing nature-dependent electricity are defined contracts that expose an entity to variability in the underlying amount of electricity because the source of electricity generation depends on uncontrollable natural conditions (for example, the weather). The amendments clarify that ‘contracts to buy or sell such electricity’ are assessed for eligibility under the own-use exemption. In addition, the amendments modify hedge accounting requirements by allowing an entity to designate as the hedged item a variable nominal amount of forecast electricity transactions that reflect the nature-dependent variability of electricity and introduce additional disclosure requirements. These amendments are required to be applied for annual reporting periods beginning on or after January 1, 2026 and earlier application is permitted. The amendments do not have a significant impact on the financial statements.

 

(iv)
Standards to Korean IFRS 1118 Presentation and Disclosure in Financial Statements

 

Korean IFRS 1118 Presentation and Disclosure in Financial Statements replaces Korean IFRS 1001 Presentation of Financial Statements, and includes new requirements aimed at improving comparability of financial performance among similar entities and providing more relevant information to users of financial statements. The amendments do not affect the recognition or measurement of items in the financial statements, but the impact on presentation and disclosure, including those relating to the statement of comprehensive income and management-defined performance measures, is expected to be extensive.

 

The amendments should be applied for annual periods beginning on or after January 1, 2027, and earlier application is permitted. In accordance with the retrospective application requirements, comparative information for the year ended December 31, 2026, shall be restated under Korean IFRS 1118.

 

The Group is in the process of determining the impact on the Group of applying Korean IFRS 1118. Adoption of the standard is not expected to have an impact on the Group’s net profit or loss; however, it will require revenues and expenses in the income statements to be classified into new categories, which is expected to have an impact on the calculation and presentation of operating profit (loss).

40

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

4.
Cash and Cash Equivalents and Deposits in Banks

 

Details of cash and cash equivalents and deposits in banks as of December 31, 2025 and 2024 are as follows:

 

(In millions of won)

 

 

 

 

 

 

December 31, 2025

 

December 31, 2024

Current assets

 

 

 

 

Cash and cash equivalents

 

 

 

 

Deposits

W

1,572,058

 

2,021,640

Deposits in banks

 

 

 

 

Time deposits

W

600

 

600

Non-current assets

 

 

 

 

Deposits in banks

 

 

 

 

Deposit for checking account

W

11

 

11

 

 

5.
Trade Accounts and Notes Receivable, and Other Accounts Receivable

 

(a)
Details of trade accounts and notes receivable and other accounts receivable as of December 31, 2025 and 2024 are as follows:

 

(In millions of won)

 

 

 

 

 

 

December 31, 2025

 

December 31, 2024

Trade accounts and notes receivable, net

W

2,359,184

 

3,624,477

Other accounts receivable

 

 

 

 

Non-trade receivables, net

W

145,426

 

227,477

Accrued income, net

 

34,987

 

22,552

Subtotal

 

180,413

 

250,029

Total

 

2,539,597

 

3,874,506

 

 

 

 

 

41

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

5.
Trade Accounts and Notes Receivable, and Other Accounts Receivable, Continued

 

(b) The aging of trade accounts and notes receivable and other accounts receivable as of December 31, 2025 and 2024 are as follows:

 

(In millions of won)

 

December 31, 2025

 

 

Original amount

 

Allowance for doubtful account

 

 

Trade accounts

and notes

receivable

 

Other

accounts

receivable

 

Trade accounts

and notes

receivable

 

Other

accounts

receivable

Not past due

W

2,351,767

 

128,489

 

(722)

 

(523)

1-15 days past due

 

1,385

 

1,314

 

-

 

(1)

16-30 days past due

 

5,581

 

10,224

 

-

 

(1)

31-60 days past due

 

1,167

 

10,768

 

-

 

(3)

More than 60 days past due

 

6

 

30,422

 

-

 

(276)

Total

W

2,359,906

 

181,217

 

(722)

 

(804)

 

(In millions of won)

 

December 31, 2024

 

 

Original amount

 

Allowance for doubtful account

 

 

Trade accounts

and notes

receivable

 

Other

accounts

receivable

 

Trade accounts

and notes

receivable

 

Other

accounts

receivable

Not past due

W

3,609,870

 

207,928

 

(1,369)

 

(464)

1-15 days past due

 

15,951

 

37,722

 

(14)

 

(2)

16-30 days past due

 

4

 

1,915

 

-

 

(1)

31-60 days past due

 

35

 

350

 

-

 

(3)

More than 60 days past due

 

-

 

2,592

 

-

 

(8)

Total

W

3,625,860

 

250,507

 

(1,383)

 

(478)

 

The movement in the allowance for doubtful account in respect of trade accounts and notes receivable and other accounts receivable for the years ended December 31, 2025 and 2024 are as follows:

 

(In millions of won)

 

2025

 

2024

 

 

Trade accounts and notes receivable

 

Other accounts receivable

 

Trade accounts and notes receivable

 

Other accounts receivable

At January 1

W

1,383

 

478

 

933

 

207

(Reversal of) bad debt expense

 

(661)

 

326

 

450

 

271

At December 31

W

722

 

804

 

1,383

 

478

 

 

 

 

42

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

6.
Other Financial Assets

 

Details of other financial assets as of December 31, 2025 and 2024 are as follows:

 

(In millions of won)

 

December 31, 2025

 

December 31, 2024

Current assets

 

 

 

 

Financial assets at fair value through profit or loss

 

 

 

 

Derivatives (*1)

W

62,740

 

186,676

Fair value hedging derivatives

 

 

 

 

Derivatives (*2)

W

-

 

99,116

Financial assets carried at amortized cost

 

 

 

 

Deposits

W

8,851

 

10,429

Short-term loans

 

13,318

 

26,098

Subtotal

W

22,169

 

36,527

Other financial assets

 

 

 

 

Lease receivables

W

4,616

 

6,302

Total

W

89,525

 

328,621

Non-current assets

 

 

 

 

Financial assets at fair value through profit or loss

 

 

 

 

Equity instruments

W

124,316

 

120,501

Convertible securities

 

-

 

1,470

Derivatives (*1)

 

69,247

 

69,575

Subtotal

W

193,563

 

191,546

Fair value hedging derivatives

 

 

 

 

Derivatives (*2)

W

-

 

19,982

Financial assets carried at amortized cost

 

 

 

 

Deposits

W

5,698

 

6,318

Long-term loans

 

-

 

11,045

Subtotal

W

5,698

 

17,363

Other financial assets

 

 

 

 

Lease receivables

W

2,790

 

3,761

Total

W

202,051

 

232,652

 

(*1) The derivatives, which are not designated as hedging instruments, arise from cross-currency interest rate swap contracts and others for the purpose of managing currency and interest rate risks associated with foreign currency denominated borrowings and bonds.

 

(*2) The derivatives, which are designated as hedging instruments, arise from forward exchange contracts for the purpose of managing currency risk associated with advances received in foreign currency.

 

 

 

43

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

7.
Inventories

 

Details of inventories as of December 31, 2025 and 2024 are as follows:

 

(i) As of December 31, 2025

(In millions of won)

 

 

 

 

 

 

 

 

Cost

 

Valuation

allowance

 

Carrying

amount

Finished goods

W

802,647

 

(57,184)

 

745,463

Work-in-process

 

1,271,007

 

(156,597)

 

1,114,410

Raw materials

 

528,812

 

(24,969)

 

503,843

Supplies

 

204,905

 

(22,955)

 

181,950

Total

W

2,807,371

 

(261,705)

 

2,545,666

 

(ii) As of December 31, 2024

(In millions of won)

 

 

 

 

 

 

 

 

Cost

 

Valuation

allowance

 

Carrying

amount

Finished goods

W

995,999

 

(51,305)

 

944,694

Work-in-process

 

1,184,516

 

(82,655)

 

1,101,861

Raw materials

 

477,929

 

(17,648)

 

460,281

Supplies

 

184,869

 

(20,463)

 

164,406

Total

W

2,843,313

 

(172,071)

 

2,671,242

 

For the years ended December 31, 2025 and 2024, the amounts of inventories recognized as expense and (reversal of) loss on valuation of inventories are as follows:

 

(In millions of won)

 

2025

 

2024

Cost of sales

W

22,433,623

 

24,039,928

Inventories recognized as expense

 

22,347,699

 

24,057,293

(Reversal of) write-downs of inventories included in (deducted from) cost of sales

 

85,924

 

(17,365)

 

 

44

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

8.
Investments in equity accounted investees

 

(a) Details of investments in associates as of December 31, 2025 and 2024 are as follows:

 

(In millions of won)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2025

 

December 31, 2024

Associates

 

Location

 

Closing

 

Business

 

Percentage of ownership

 

 

Carrying

amount

 

Percentage of ownership

 

Carrying

amount

Paju Electric Glass Co., Ltd.

 

Paju,

South Korea

 

December

 

Production of glass for display

 

40%

W

31,479

 

40%

W

29,479

Arctic Sentinel, Inc.

 

Los Angeles, U.S.A.

 

March

 

Development and production of

tablet for kids

 

10%

 

-

 

10%

 

-

Cynora GmbH

 

Bruchsal,

Germany

 

December

 

Development of organic light emitting materials for displays and lighting devices

 

10%

 

-

 

10%

 

-

Material Science Co., Ltd. (*)

 

Hwaseong,

South Korea

 

December

 

Development, production, and sales of materials for display

 

9%

5,027

 

14%

 

3,698

Total

 

 

 

 

 

 

 

 

W

36,506

 

 

W

33,177

 

(*) Due to the investee’s issuance of new shares, the Parent Company’s percentage of ownership decreased from 14% to 9%.

 

Although the Parent Company’s respective share interests in Arctic Sentinel, Inc., Cynora GmbH and Material Science Co., Ltd. are below 20%, the Parent Company is able to exercise significant influence through its right to appoint one or more directors to the board of directors of each investee. Accordingly, the investments in these investees have been accounted for using the equity method.

 

Dividend income recognized from associates for the years ended December 31, 2025 and 2024 amounted to W1,664 million and W200 million, respectively.

 

 

45

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

8. Investments in Equity Accounted Investees, Continued

 

(b) Summarized financial information of the significant associates as of December 31, 2025 and 2024 is as follows:

 

Paju Electric Glass Co., Ltd.

 

(In millions of won)

 

 

 

 

 

 

December 31, 2025

 

December 31, 2024

Total assets

W

122,221

 

123,520

Current assets

 

110,544

 

110,055

Non-current assets

 

11,677

 

13,465

Total liabilities

 

42,107

 

48,088

Current liabilities

 

41,469

 

47,418

Non-current liabilities

 

638

 

670

Revenue

 

274,754

 

277,093

Profit for the year

 

7,499

 

10,015

Other comprehensive income

 

1,342

 

3,301

Total comprehensive income

 

8,841

 

13,316

 

(c) The reconciliation of the summarized financial information of the significant associates to the carrying amounts of the equity accounted investments as of December 31, 2025 and 2024 is as follows:

 

(i) As of December 31, 2025

 

(In millions of won)

 

 

 

 

 

 

 

 

 

 

 

Company

 

Net assets

 

Ownership interest

 

Net assets (applying ownership interest)

 

Intra-group transaction

 

Carrying

amount

Paju Electric Glass Co., Ltd.

W

80,114

 

40%

 

32,046

 

(567)

 

31,479

 

(ii) As of December 31, 2024

 

 

(In millions of won)

 

 

 

 

 

 

 

 

 

 

 

Company

 

Net assets

 

Ownership interest

 

Net assets (applying ownership interest)

 

Intra-group transaction

 

Carrying

amount

Paju Electric Glass Co., Ltd.

W

75,432

 

40%

 

30,173

 

(694)

 

29,479

 

46

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

8. Investments in Equity Accounted Investees, Continued

 

(d) Carrying amount of other associates, in aggregate, as of December 31, 2025 and 2024 is as follows:

 

(i) As of December 31, 2025

 

(In millions of won)

 

 

 

 

 

 

 

 

 

 

 

Book value

 

Net profit (loss) of associates (applying ownership interest)

 

 

 

 

Profit (loss) for the year

 

Other comprehensive income (loss)

 

Total comprehensive income (loss)

Other associates

W

5,027

 

(644)

 

2,263

 

1,619

 

(ii) As of December 31, 2024

 

(In millions of won)

 

 

 

 

 

 

 

 

 

 

 

Book value

 

Net profit (loss) of associates (applying ownership interest)

 

 

 

 

Profit (loss) for the year

 

Other comprehensive income (loss)

 

Total comprehensive income (loss)

Other associates

W

3,698

 

1,455

 

1,912

 

3,367

 

 

 

47

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

8. Investments in Equity Accounted Investees, Continued

 

(e) Changes in investments in associates accounted for using the equity method for the years ended December 31, 2025 and 2024 are as follows:

 

(In millions of won)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2025

Company

 

January 1

 

Disposals and others

 

Dividends received

 

Equity income on investments

 

Other comprehensive income

 

Other gain

 

December 31

Associates

Paju Electric Glass Co., Ltd.

W

29,479

 

-

 

(1,664)

 

3,127

 

537

 

-

 

31,479

 

Others

 

3,698

 

(1,853)

 

-

 

(644)

 

2,263

 

1,563

 

5,027

Total

 

W

33,177

 

(1,853)

 

(1,664)

 

2,483

 

2,800

 

1,563

 

36,506

 

(In millions of won)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2024

Company

 

January 1

 

Disposals and others

 

Dividends received

 

Equity income on investments

 

Other comprehensive income

 

Other gain

 

December 31

Associates

Paju Electric Glass Co., Ltd.

W

24,200

 

-

 

-

 

3,957

 

1,322

 

-

 

29,479

 

Others

 

60,129

 

(60,581)

 

(200)

 

1,455

 

1,912

 

983

 

3,698

Total

 

W

84,329

 

(60,581)

 

(200)

 

5,412

 

3,234

 

983

 

33,177

 

48

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

9.
Property, Plant and Equipment

 

(a) Changes in property, plant and equipment for the years ended December 31, 2025 and 2024 are as follows:

 

(i) 2025

 

(In millions of won)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Land

 

Buildings

and

structures

 

Machinery

and

equipment

 

Furniture

and

fixtures

 

Construction-

in-progress (*1)

 

Right-of-use

asset

 

Others (*2)

 

Total

Acquisition cost as of January 1, 2025

W

426,342

 

10,529,816

 

53,029,839

 

925,048

 

3,581,525

 

225,250

 

1,570,421

 

70,288,241

Accumulated depreciation as of January 1, 2025

 

-

 

(4,813,622)

 

(43,403,177)

 

(793,522)

 

-

 

(129,395)

 

(1,161,523)

 

(50,301,239)

Accumulated impairment loss as of January 1, 2025

 

-

 

(490,962)

 

(1,950,261)

 

(14,375)

 

(291,807)

 

(6,922)

 

(29,802)

 

(2,784,129)

Book value as of January 1, 2025

W

426,342

 

5,225,232

 

7,676,401

 

117,151

 

3,289,718

 

88,933

 

379,096

 

17,202,873

Additions

 

-

 

-

 

-

 

-

 

1,230,814

 

59,797

 

-

 

1,290,611

Depreciation (*3)

 

-

 

(405,985)

 

(2,820,923)

 

(68,357)

 

-

 

(54,801)

 

(298,610)

 

(3,648,676)

Disposals

 

(12,559)

 

(38,691)

 

(79,455)

 

(230)

 

-

 

-

 

(35,999)

 

(166,934)

Reversal (Impairment loss) (*4)

 

-

 

(1)

 

(1,696)

 

23

 

(151,170)

 

-

 

(6,418)

 

(159,262)

Others (*5)

 

2,320

 

78,511

 

824,638

 

59,400

 

(1,278,851)

 

-

 

319,314

 

5,332

Government grants received

 

-

 

-

 

(1,041)

 

-

 

-

 

-

 

-

 

(1,041)

Effect of movements in exchange rates

 

-

 

(25,102)

 

(26,561)

 

(610)

 

(4,615)

 

5,819

 

(1,058)

 

(52,127)

Book value as of December 31, 2025

W

416,103

 

4,833,964

 

5,571,363

 

107,377

 

3,085,896

 

99,748

 

356,325

 

14,470,776

Acquisition cost as of December 31, 2025

W

416,103

 

10,241,886

 

52,909,959

 

898,593

 

3,527,370

 

242,844

 

1,706,196

 

69,942,951

Accumulated depreciation as of December 31, 2025

W

-

 

(4,917,449)

 

(45,387,667)

 

(777,017)

 

-

 

(136,546)

 

(1,317,039)

 

(52,535,718)

Accumulated impairment loss as of December 31, 2025

W

-

 

(490,473)

 

(1,950,929)

 

(14,199)

 

(441,474)

 

(6,550)

 

(32,832)

 

(2,936,457)

 

(*1) As of December 31, 2025, construction-in-progress mainly relates to construction of manufacturing facilities.

(*2) Others mainly consist of tools and equipment.

(*3) The Group has classified the depreciation as manufacturing overhead costs, selling expenses, administrative expenses and research and development expenses. It includes capitalized development costs.

(*4) Impairment losses are recognized for the difference between the carrying amount and the recoverable amount of property, plant and equipment.

(*5) Others mainly represent the reclassification of construction-in-progress to other property, plant and equipment.

 

 

 

49

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

9. Property, Plant and Equipment, Continued

 

(ii) 2024

 

(In millions of won)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Land

 

Buildings

and

structures

 

Machinery

and

equipment

 

Furniture

and

fixtures

 

Construction-

in-progress (*1)

 

Right-of-use

asset

 

Others (*2)

 

Total

Acquisition cost as of January 1, 2024

W

472,813

 

10,192,281

 

52,107,890

 

942,376

 

7,571,687

 

245,149

 

1,448,688

 

72,980,884

Accumulated depreciation as of January 1, 2024

 

-

 

(4,715,087)

 

(43,466,025)

 

(775,953)

 

-

 

(119,804)

 

(1,062,377)

 

(50,139,246)

Accumulated impairment loss as of January 1, 2024

 

-

 

(447,003)

 

(1,860,182)

 

(13,285)

 

(285,626)

 

(6,099)

 

(29,111)

 

(2,641,306)

Book value as of January 1, 2024

W

472,813

 

5,030,191

 

6,781,683

 

153,138

 

7,286,061

 

119,246

 

357,200

 

20,200,332

Additions

 

-

 

-

 

-

 

-

 

1,499,468

 

33,865

 

-

 

1,533,333

Depreciation (*3)

 

-

 

(444,982)

 

(3,424,197)

 

(80,195)

 

-

 

(68,445)

 

(305,354)

 

(4,323,173)

Disposals

 

(47,344)

 

(28,598)

 

(132,473)

 

(178)

 

-

 

-

 

(52,377)

 

(260,970)

Impairment loss (*4)

 

-

 

(28)

 

(58,660)

 

(1,275)

 

(27,000)

 

-

 

(7,249)

 

(94,212)

Others (*5)

 

873

 

948,851

 

4,186,807

 

42,191

 

(5,565,372)

 

-

 

385,812

 

(838)

Government grants received

 

-

 

-

 

(2,307)

 

-

 

-

 

-

 

-

 

(2,307)

Effect of movements in exchange rates

 

-

 

265,665

 

350,074

 

7,520

 

106,339

 

23,058

 

9,741

 

762,397

Classified as held for sale

 

-

 

(545,867)

 

(24,526)

 

(4,050)

 

(9,778)

 

(18,791)

 

(8,677)

 

(611,689)

Book value as of December 31, 2024

W

426,342

 

5,225,232

 

7,676,401

 

117,151

 

3,289,718

 

88,933

 

379,096

 

17,202,873

Acquisition cost as of December 31, 2024

W

426,342

 

10,529,816

 

53,029,839

 

925,048

 

3,581,525

 

225,250

 

1,570,421

 

70,288,241

Accumulated depreciation as of December 31, 2024

W

-

 

(4,813,622)

 

(43,403,177)

 

(793,522)

 

-

 

(129,395)

 

(1,161,523)

 

(50,301,239)

Accumulated impairment loss as of December 31, 2024

W

-

 

(490,962)

 

(1,950,261)

 

(14,375)

 

(291,807)

 

(6,922)

 

(29,802)

 

(2,784,129)

 

(*1) As of December 31, 2024, construction-in-progress mainly relates to construction of manufacturing facilities.

(*2) Others mainly consist of tools and equipment.

(*3) The Group has classified the depreciation as manufacturing overhead costs, selling expenses, administrative expenses and research and development expenses. It includes capitalized development costs.

(*4) Impairment losses are recognized for the difference between the carrying amount and the recoverable amount of property, plant and equipment.

(*5) Others mainly represent the reclassification of construction-in-progress to other property, plant and equipment.

 

 

 

50

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

9. Property, Plant and Equipment, Continued

 

(b) Capitalized borrowing costs and capitalization rate for the years ended December 31, 2025 and 2024 are as follows:

(In millions of won)

 

 

 

 

2025

 

2024

Capitalized borrowing costs

W

13,962

 

41,826

Capitalization rate

 

4.57%

 

5.64%

 

(c) The Group provides a portion of property, plant and equipment as an operating lease. For the year ended December 31, 2025, rental income from property, plant and equipment is W5,028 million (2024: W1,755 million).

51

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

10. Intangible Assets

 

(a) Changes in intangible assets for the years ended December 31, 2025 and 2024 are as follows:

 

(i) 2025

 

(In millions of won)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intellectual

property rights

 

Software

 

Member-ships

 

Development costs

 

Construction-in-progress

 

Technology

 

Good-will

 

Total

Acquisition cost as of January 1, 2025

W

2,275,735

 

1,482,559

 

15,562

 

2,357,041

 

15,528

 

12,763

 

114,191

 

6,273,379

Accumulated amortization as of

January 1, 2025

 

(1,525,276)

 

(1,228,377)

 

-

 

(1,715,408)

 

-

 

(11,738)

 

-

 

(4,480,799)

Accumulated impairment loss as of January 1, 2025

 

(60,627)

 

(24,192)

 

-

 

(64,353)

 

-

 

(43)

 

(84,958)

 

(234,173)

Book value as of January 1, 2025

W

689,832

 

229,990

 

15,562

 

577,280

 

15,528

 

982

 

29,233

 

1,558,407

Additions - internally generated

 

-

 

-

 

-

 

546,706

 

-

 

-

 

-

 

546,706

Additions - external purchases

 

67,785

 

-

 

-

 

-

 

107,069

 

-

 

-

 

174,854

Amortization (*1)

 

(167,885)

 

(129,238)

 

-

 

(453,824)

 

-

 

(224)

 

-

 

(751,171)

Disposals

 

(326)

 

-

 

-

 

(3,741)

 

-

 

-

 

-

 

(4,067)

Reversal(Impairment loss) (*2)

 

(1,106)

 

286

 

-

 

(54,184)

 

-

 

-

 

-

 

(55,004)

Others (*3)

 

-

 

122,267

 

-

 

-

 

(113,582)

 

2,400

 

-

 

11,085

Effect of movements in exchange rates

 

86

 

(1,916)

 

(15)

 

-

 

(4)

 

-

 

(926)

 

(2,775)

Book value as of December 31, 2025

W

588,386

 

221,389

 

15,547

 

612,237

 

9,011

 

3,158

 

28,307

 

1,478,035

Acquisition cost as of December 31, 2025

W

2,335,399

 

1,553,129

 

15,547

 

2,622,548

 

9,011

 

15,163

 

113,265

 

6,664,062

Accumulated amortization as of

December 31, 2025

W

(1,686,428)

 

(1,308,290)

 

-

 

(1,934,470)

 

-

 

(11,962)

 

-

 

(4,941,150)

Accumulated impairment loss as of December 31, 2025

W

(60,585)

 

(23,450)

 

-

 

(75,841)

 

-

 

(43)

 

(84,958)

 

(244,877)

 

 

(*1) The Group has classified the amortization as manufacturing overhead costs, selling expenses, administrative expenses and research and development expenses.

(*2) The Group recognized an impairment loss amounting to W54,184 million for development projects which are not likely to generate probable future economic benefits.

(*3) Others mainly represent the reclassification of construction-in-progress to intangible assets.

52

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

10. Intangible Assets, Continued

 

(ii) 2024

 

(In millions of won)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intellectual

property rights

 

Software

 

Member-ships

 

Development costs

 

Construction-in-progress

 

Technology

 

Good-will

 

Total

Acquisition cost as of January 1, 2024

W

2,189,071

 

1,403,157

 

23,463

 

2,295,468

 

33,036

 

12,763

 

109,115

 

6,066,073

Accumulated amortization as of

January 1, 2024

 

(1,299,655)

 

(1,160,702)

 

-　

 

(1,509,575)

 

-

 

(11,574)

 

-

 

(3,981,506)

Accumulated impairment loss as of January 1, 2024

 

(60,637)

 

(19,001)

 

(1,541)

 

(144,432)

 

-

 

(43)

 

(84,958)

 

(310,612)

Book value as of January 1, 2024

W

828,779

 

223,454

 

21,922

 

641,461

 

33,036

 

1,146

 

24,157

 

1,773,955

Additions - internally generated

 

-

 

-

 

-

 

548,224

 

-

 

-

 

-

 

548,224

Additions - external purchases

 

49,818

 

-

 

-

 

-

 

110,616

 

-

 

-

 

160,434

Amortization (*1)

 

(188,058)

 

(122,539)

 

-

 

(546,377)

 

-

 

(164)

 

-

 

(857,138)

Disposals

 

-

 

(187)

 

(6,433)

 

-

 

-

 

-

 

-

 

(6,620)

Impairment loss (*2)

 

(1,931)

 

(4,517)

 

-

 

(66,028)

 

-

 

-

 

-

 

(72,476)

Others (*3)

 

-

 

128,986

 

-

 

-

 

(128,148)

 

-

 

-

 

838

Effect of movements in exchange rates

 

1,224

 

5,568

 

73

 

-

 

24

 

-

 

5,076

 

11,965

Classified as held for sale

 

-

 

(775)

 

-

 

-

 

-

 

-

 

-

 

(775)

Book value as of December 31, 2024

W

689,832

 

229,990

 

15,562

 

577,280

 

15,528

 

982

 

29,233

 

1,558,407

Acquisition cost as of December 31, 2024

W

2,275,735

 

1,482,559

 

15,562

 

2,357,041

 

15,528

 

12,763

 

114,191

 

6,273,379

Accumulated amortization as of

December 31, 2024

W

(1,525,276)

 

(1,228,377)

 

-

 

(1,715,408)

 

-

 

(11,738)

 

-

 

(4,480,799)

Accumulated impairment loss as of December 31, 2024

W

(60,627)

 

(24,192)

 

-

 

(64,353)

 

-

 

(43)

 

(84,958)

 

(234,173)

 

 

(*1) The Group has classified the amortization as manufacturing overhead costs, selling expenses, administrative expenses and research and development expenses.

(*2) The Group recognized an impairment loss amounting to W66,028 million for development projects which are not likely to generate probable future economic benefits.

(*3) Others mainly represent the reclassification of construction-in-progress to intangible assets.

53

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

10.
Intangible Assets, Continued

 

(b) The book value and remaining amortization period of development costs and intellectual property rights as of December 31, 2025 and 2024 are as follows:

 

Development costs

 

(i) As of December 31, 2025

 

(In millions of won and in years)

 

 

 

 

Classification

 

Category

 

Book Value

 

Remaining

amortization period(*)

Development completed

 

TV

W

21,361

 

0.7

 

 

IT

 

66,077

 

0.8

 

 

Mobile and others

 

253,106

 

2.4

 

 

Subtotal

W

340,544

 

 

Development

in process

 

TV

W

21,758

 

-

 

 

IT

 

25,502

 

-

 

 

Mobile and others

 

224,433

 

-

 

 

Subtotal

W

271,693

 

 

 

 

Total

W

612,237

 

 

(*) Weighted average of the remaining useful life based on the book value at the end of the reporting period as each product has a different remaining amortization period.

 

(ii) As of December 31, 2024

 

(In millions of won and in years)

 

 

 

 

Classification

 

Category

 

Book Value

 

Remaining

amortization period(*)

Development completed

 

TV

W

49,705

 

0.8

 

 

IT

 

49,615

 

0.7

 

 

Mobile and others

 

255,128

 

2.7

 

 

Subtotal

W

354,448

 

 

Development

in process

 

TV

W

14,802

 

-

 

 

IT

 

37,737

 

-

 

 

Mobile and others

 

170,293

 

-

 

 

Subtotal

W

222,832

 

 

 

 

Total

W

577,280

 

 

(*) Weighted average of the remaining useful life based on the book value at the end of the reporting period as each product has a different remaining amortization period.

 

 

54

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

10. Intangible Assets, Continued

 

Intellectual property rights

 

(i) As of December 31, 2025

 

(In millions of won and in years)

 

 

 

 

Classification

 

Category

 

Book Value

 

Remaining

amortization period (*1)

Patent

 

Direct additions

W

263,559

 

6.9

 

 

Licenses agreement (*2)

 

321,790

 

4.9

 

 

Subtotal

W

585,349

 

 

Other

 

 

 

3,037

 

3.6

 

 

Total

W

588,386

 

 

 

(*1) Weighted average of the remaining useful life based on the book value at the end of the reporting period as each patent has a different remaining amortization period.

(*2) The Group’s rights under contracts with the patent company.

 

(ii) As of December 31, 2024

 

(In millions of won and in years)

 

 

 

 

Classification

 

Category

 

Book Value

 

Remaining

amortization period (*1)

Patent

 

Direct additions

W

237,364

 

7.0

 

 

Licenses agreement (*2)

 

449,617

 

5.1

 

 

Subtotal

W

686,981

 

 

Other

 

 

 

2,851

 

3.7

 

 

Total

W

689,832

 

 

 

(*1) Weighted average of the remaining useful life based on the book value at the end of the reporting period as each patent has a different remaining amortization period.

(*2) The Group’s rights under contracts with the patent company.

 

(c) The total amount of research and development expenditure recognized as an expense for the year ended December 31, 2025 is W1,410,786 million (2024: W1,447,706 million).

55

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

10. Intangible Assets, Continued

 

(d) Details of impairment test on Good-will

 

As of December 31, 2025, the entire amount of goodwill has been allocated to the Display cash-generating unit(CGU). Accordingly, the Group performed an impairment test on the Display CGU to which the goodwill has been allocated.

 

The recoverable amount of CGU is determined based on its value in use. Value in use is calculated using the estimated cash flow based on 5-year business plan approved by management. The estimated revenue and operating expenditures of the Group’s products used in the forecast was determined considering external sources and the Group’s historical experience. Management estimated the future cash flows based on its past performance and forecasts on market growth. The key assumptions used in the estimation of value in use for Display CGU include revenue and operating expenditures for the forecast period and discount rate. Terminal growth rate and the discount rate used in the estimation of value in use are as follows.

 

Classification

 

Pre-tax

discount rate(*)

 

Post-tax

discount rate(*)

 

Terminal growth rate

Display CGU

 

9.1%

 

7.2%

 

1.0%

 

 

(*) The discount rate was calculated using the weighted average cost of equity capital and debt and the beta of equity capital was calculated as the average of seven global listed companies in the same industry and the Group. Cost of debt was calculated using the yield rate of non-guaranteed corporate bond considering the Group’s credit rating and debt ratio was determined using the average of the debt ratios of the seven global listed companies in the same industry and the Group. The Group calculates the value in use of the CGU using post-tax cash flows and a post-tax discount rate, and the result is not significantly different from the value in use calculated using pre-tax cash flows and pre-tax discount rate.

 

As a result of impairment test for Display CGU to which goodwill is allocated, the recoverable amount exceeded its carrying amount by W611,764 million. Management has identified that a reasonably possible change in certain key assumption could cause the carrying amount to exceed the recoverable amount. The value in use determined for this CGU is sensitive to the discount rate used in the discounted cash flow model. Specifically, the discount rate would need to increase by 0.89% (holding all the other assumptions constant) for the estimated recoverable amount to be equal to the carrying amount.

 

56

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

11.
Investment Property

 

(a) Changes in investment property for the years ended December 31, 2025 and 2024 are as follows:

 

(In millions of won)

 

2025

 

2024

Book value as of January 1

W

27,911

 

32,995

Transfer

 

(5,331)

 

-

Depreciation

 

(4,558)

 

(5,084)

Others

 

9

 

-

Book value as of December 31

W

18,031

 

27,911

 

(b) For the year ended December 31, 2025, rental revenue from investment property is W8,966 million (2024: W8,891 million) and rental cost is W4,956 million (2024: W5,468 million).

 

 

12.
Financial Liabilities

 

(a)
Details of financial liabilities as of December 31, 2025 and 2024 are as follows:

 

(In millions of won)

 

 

 

 

 

 

December 31, 2025

 

December 31, 2024

Current

 

 

 

 

Short-term borrowings

W

810,718

 

969,595

Current portion of long-term borrowings

 

2,548,958

 

4,907,390

Current portion of bonds

 

398,223

 

611,882

Derivatives (*)

 

4,066

 

3,762

Lease liabilities

 

36,429

 

34,821

Total

W

3,798,394

 

6,527,450

Non-current

 

 

 

 

Long-term borrowings

W

8,781,368

 

7,535,290

Bonds

 

124,871

 

525,957

Derivatives (*)

 

5,487

 

7,006

Lease liabilities

 

23,249

 

23,154

Total

W

8,934,975

 

8,091,407

 

(*) The derivatives, which are not designated as hedging instruments, arise from cross currency interest rate swap contracts and others for the purpose of managing currency and interest rate risks associated with foreign currency denominated borrowings and bonds.

 

 

57

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

12.
Financial Liabilities, Continued

 

(b) Details of short-term borrowings as of December 31, 2025 and 2024 are as follows:

 

(In millions of won)

 

 

 

 

 

 

 

 

Lender

 

Description

 

Annual interest rate as of

December 31, 2025 (%)

 

December 31,

2025

 

December 31,

2024

Standard Chartered Bank Korea Limited and others

 

Working capital and others

 

3.60~5.72

W

810,718

 

969,595

 

(c) Details of Korean won denominated long-term borrowings as of December 31, 2025 and 2024 are as follows:

(In millions of won)

 

 

 

 

 

 

 

 

 

 

Lender

 

Description

 

Latest maturity

date

 

Annual interest

rate as of

December 31, 2025 (%)

 

December 31,

2025

 

December 31,

2024

LG Electronics Inc.

 

Operating capital

 

-

 

-

W

-

 

1,000,000

Korea Development Bank and others

 

Facility capital and others

 

January 2026 ~ March 2030

 

3.46~5.65

 

4,000,423

 

3,668,538

Less: current portion

 

 

 

 

 

 

 

(1,190,000)

 

(1,861,000)

Total

 

 

 

 

 

 

W

2,810,423

 

2,807,538

 

(d) Details of foreign currency denominated long-term borrowings as of December 31, 2025 and 2024 are as follows:

 

(In millions of won, USD and CNY)

Lender

 

Description

 

Latest maturity date

 

Annual interest

rate as of

December 31, 2025 (%)

 

December 31,

2025

 

December 31, 2024

KEB Hana Bank and others

 

Facility capital and others

 

January 2026 ~

July 2029

 

2.03~6.27

W

7,329,903

 

7,774,142

Foreign currency equivalent of

 foreign currency borrowings

 

USD 2,350

 

USD 2,528

 

CNY 19,332

 

CNY 20,164

Less: current portion

 

(1,358,958)

 

(3,046,390)

Total

 

 

 

 

 

 

W

5,970,945

 

4,727,752

 

58

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

12.
Financial Liabilities, Continued

 

(e) Details of bonds issued and outstanding as of December 31, 2025 and 2024 are as follows:

 

(In millions of won and USD)

 

 

 

 

 

 

 

 

 

 

Maturity

 

Annual interest rate as of

December 31, 2025 (%)

 

December 31,

2025

 

December 31, 2024

Korean won denominated bonds at amortized cost (*1)

 

 

 

 

 

 

 

 

Publicly issued bonds

 

 

September 2026 ~

February 2027

 

2.79~3.66

W

335,000

 

655,000

Privately issued bonds

 

January 2026

 

7.25

 

45,000

 

337,000

Less: discount on bonds

 

 

 

 

 

(257)

 

(705)

Less: current portion

 

 

 

 

 

(254,872)

 

(611,882)

Subtotal

 

 

 

 

W

124,871

 

379,413

Foreign currency denominated bonds at amortized cost (*2)

 

 

 

 

 

 

 

 

Privately issued bonds

 

April 2026

 

5.76

W

143,490

 

147,000

Foreign currency equivalent of foreign currency denominated bonds

 

 

 

 

 

USD 100

 

USD 100

Less: discount on bonds

 

 

 

 

 

(139)

 

(456)

Less: foreign currency equivalent of discount on bonds

of foreign currency denominated bonds

 

 

 

 

 

USD (0)

 

USD (0)

Less: current portion

 

(143,351)

 

-

Subtotal

 

 

 

 

W

-

 

146,544

Total

 

 

 

 

W

124,871

 

525,957

 

(*1) Principal of the Korean won denominated bonds is to be repaid at maturity and interest is paid quarterly.

(*2) Principal of the foreign currency denominated bonds is to be repaid at maturity and interest is paid quarterly.

 

 

 

59

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

13.
Post-employment Benefits

 

(a) Defined benefit plans

 

The Parent Company and its certain subsidiaries’ defined benefit plans provide a lump-sum payment to an employee based on final salary rates and length of service at the time the employee leaves the Parent Company or its certain subsidiaries.

 

The defined benefit plans expose the Group to actuarial risks, such as the risk associated with expected periods of service, interest rate risk, market (investment) risk, and others.

 

i) Details of net defined benefit liabilities (defined benefit assets) recognized as of December 31, 2025 and 2024 are as follows:

 

(In millions of won)

 

 

 

 

 

 

December 31, 2025

 

December 31, 2024

Present value of defined benefit obligations

W

1,276,310

 

1,444,252

Fair value of plan assets

 

(1,473,736)

 

(1,603,911)

Total

W

(197,426)

 

(159,659)

  Defined benefit liabilities, net

W

1,109

 

1,093

  Defined benefit assets, net

W

(198,535)

 

(160,752)

 

ii) Changes in the present value of the defined benefit obligations for the years ended December 31, 2025 and 2024 are as follows:

(In millions of won)

 

 

 

 

 

 

2025

 

2024

Defined benefit obligations at January 1

W

1,444,252

 

1,491,146

Current service cost

 

146,650

 

148,868

Interest cost

 

55,318

 

67,426

Remeasurements (before tax)

 

(82,071)

 

142,422

Benefit payments

 

(284,794)

 

(399,549)

Net transfers from (to) related parties

 

(3,036)

 

(5,975)

Others

 

(9)

 

(86)

Defined benefit obligations at December 31

W

1,276,310

 

1,444,252

 

 

Weighted average remaining maturity of defined benefit obligations as of December 31, 2025 is 7.62 years (December 31, 2024 : 9.98 years).

 

iii) Changes in fair value of plan assets for the years ended December 31, 2025 and 2024 are as follows:

 

(In millions of won)

 

 

 

 

 

 

2025

 

2024

Fair value of plan assets at January 1

W

1,603,911

 

1,897,025

Interest income

 

60,768

 

86,280

Remeasurements (before tax)

 

(894)

 

(11,781)

Contributions by employer directly to plan assets

 

98,705

 

1,499

Benefit payments

 

(288,754)

 

(369,112)

Fair value of plan assets at December 31

W

1,473,736

 

1,603,911

 

The Group is considering the amount of recent contributions and the size of plan assets when estimating the contributions expected to be paid in the fiscal year commencing after the end of the reporting period.

60

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

13. Post-employment Benefits, Continued

 

iv) Details of plan assets as of December 31, 2025 and 2024 are as follows:

 

(In millions of won)

 

 

 

 

 

 

December 31, 2025

 

December 31, 2024

Time deposits in banks

W

1,473,736

 

1,603,911

 

As of December 31, 2025, the Group maintains the plan assets with Shinhan Bank, KEB Hana Bank and others.

 

v) Details of expenses related to defined benefit plans recognized in profit or loss for the years ended December 31, 2025 and 2024 are as follows:

 

(In millions of won)

 

 

 

 

 

 

2025

 

2024

Current service cost

W

146,650

 

148,868

Net interest cost

 

(5,450)

 

(18,854)

Total (*)

W

141,200

 

130,014

 

(*) The total cost related to the defined benefit plans includes capitalized amounts of W10,885 million (2024: W9,885 million).

 

Details of expenses are recognized in the consolidated statements of comprehensive income (loss) as follows:

 

(In millions of won)

 

2025

 

2024

Cost of sales

W

94,756

 

89,052

Selling expenses

 

6,988

 

6,201

Administrative expenses

 

15,624

 

14,271

Research and development expenses

 

12,947

 

10,605

Total (*)

W

130,315

 

120,129

 

(*) The total cost recognized in the consolidated statements of comprehensive income (loss) related to the defined benefit plans excludes capitalized amounts of W10,885 million (2024: W9,885 million).

 

61

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

13. Post-employment Benefits, Continued

 

vi) Details of remeasurements of the net defined benefit liabilities (assets) included in other comprehensive income (loss) for the years ended December 31, 2025 and 2024 are as follows:

 

(In millions of won)

 

2025

 

2024

Balance at January 1

W

(84,833)

 

47,087

Remeasurements

 

 

 

　

 Actuarial profit or loss arising from:

 

 

 

 

   Experience adjustment

 

(5,600)

 

(21,525)

   Demographic assumptions

 

(12,692)

 

7,487

   Financial assumptions

 

100,363

 

(128,384)

 Return on plan assets

 

(894)

 

(11,781)

 Group’s share of associates regarding remeasurements

 

-

 

(85)

Subtotal

W

81,177

 

(154,288)

Income tax

W

(7,065)

 

22,368

Balance at December 31

W

(10,721)

 

(84,833)

 

vii) Details of principal actuarial assumptions as of December 31, 2025 and 2024 are as follows:

 

 

 

December 31, 2025

 

December 31, 2024

Expected rate of salary increase

 

4.0%

 

4.0%

Discount rate for defined benefit obligations(*)

 

4.7%

 

3.9%

 

(*) For the year ended December 31, 2025, the Group changed the discount rate calculation method among the actuarial assumptions for the projected unit credit method to more reasonably determine the defined benefit obligation. As a result of this change in accounting estimate, the defined benefit obligation decreased by W83,842 million, and retained earnings increased by W76,545 million.

 

viii) Reasonably possible changes to respective relevant actuarial assumptions would have affected the defined benefit obligations by the following amounts as of December 31, 2025:

 

(In millions of won)

 

Defined benefit obligations

 

 

1% increase

 

1% decrease

Discount rate for defined benefit obligations

W

(88,618)

 

100,158

Expected rate of salary increase

 

104,279

 

(93,567)

 

 

(b) Defined contribution plans

 

The amount recognized as an expense in relation to the defined contribution plans for the year ended December 31, 2025 is W33,253 million (2024: W19,057 million).

 

62

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

14.
Provisions

 

Changes in provisions for the years ended December 31, 2025 and 2024 are as follows:

 

(i) 2025

 

(In millions of won)

 

 

 

 

 

 

 

 

 

 

Litigation

 

Warranties (*)

 

Others

 

Total

At January 1, 2025

W

7,479

 

152,683

 

5,997

 

166,159

Additions

 

8,844

 

71,255

 

13,349

 

93,448

Usage

 

(14,777)

 

(87,629)

 

(15,566)

 

(117,972)

At December 31, 2025

W

1,546

 

136,309

 

3,780

 

141,635

Current

W

1,546

 

80,964

 

3,780

 

86,290

Non-current

W

-

 

55,345

 

-

 

55,345

 

(*) The Group provides warranty on defective products for warranty periods after sales. The provision is calculated based on the assumption of expected number of warranty claims and costs per claim considering historical experience.

 

(ii) 2024

 

(In millions of won)

 

 

 

 

 

 

 

 

 

 

Litigation

 

Warranties (*)

 

Others

 

Total

At January 1, 2024

W

1,806

 

173,795

 

5,880

 

181,481

Additions

 

5,673

 

113,689

 

27,840

 

147,202

Usage

 

-

 

(134,801)

 

(27,723)

 

(162,524)

At December 31, 2024

W

7,479

 

152,683

 

5,997

 

166,159

Current

W

7,479

 

91,775

 

5,997

 

105,251

Non-current

W

-

 

60,908

 

-

 

60,908

 

(*) The Group provides warranty on defective products for warranty periods after sales. The provision is calculated based on the assumption of expected number of warranty claims and costs per claim considering historical experience.

 

 

 

 

63

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

15.
Contingent Liabilities and Commitments

 

(a)
Legal Proceedings

 

Litigation alleging violations of antitrust and competition laws

 

The Group and other LCD panel manufacturers have been sued by individual companies for alleged violations of European Union competition laws. The Group is actively defending itself in these ongoing legal proceedings, and as of December 31, 2025, the Group cannot predict the ultimate outcome of the litigation.

 

Others

 

The Group is involved in various lawsuits and disputes in addition to pending proceeding described above. The Group cannot reliably estimate the timing and amount of outflows of resources embodying economic benefits relating to the disputes.

 

(b)
Commitments

 

Factoring and transfer of trade receivables

 

The Parent Company has entered into discount agreements with Korea Development Bank and other banks for accounts receivable related to export sales transactions with its subsidiaries, with a credit limit of up to USD 1,000 million (Equivalent to W1,434,900 million). As of December 31, 2025, there are no discounted trade receivables under the agreements that remain outstanding until maturity. In relation to the above agreements, the financial institutions retain the right of recourse against the Group for any discounted receivables that are not collected at maturity.

 

The Group has entered into receivable transfer agreements with Standard Chartered Bank and other financial institutions in respect of trade receivables arising from domestic and export sales transactions, with an aggregate limit of W3,867,056 million. As of December 31, 2025, the amount of transferred trade receivables that remain outstanding until maturity under the agreement is W2,167,215 million. In relation to the above agreements, the financial institutions do not have recourse to the Group for any receivables that are not recovered at maturity.

 

Loan commitment

 

As of December 31, 2025, the Group has borrowing and letter of credit facilities with Hana Bank and other financial institutions, with a combined credit limit of W3,954,901 million.

 

Payment guarantees

 

The Group is provided with the payment guarantees for the borrowings amounting to USD 914 million (Equivalent to W1,311,588 million) by the Export-Import Bank of Korea and others.

 

The Group has entered into agreements with Seoul Guarantee Insurance Co., Ltd., China Construction Bank Corporation and others to receive guarantees up to KRW 2,662 million, CNY 830 million (Equivalent to W169,951 million), JPY 900 million (Equivalent to W8,259 million), VND 43,484 million (Equivalent to W2,374 million), and USD 0.2 million (Equivalent to W260 million) for the performance guarantees, payment of consumption tax, import value-added tax, customs duties, and electricity charges.

 

 

64

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

15.
Contingent Liabilities and Commitments, Continued

 

License agreements

 

As of December 31, 2025, the Group has a trademark license agreement with LG Corp. and pays the usage fee according to the terms of the Agreement.

 

Collateral

 

Details of collateral provided by the Group as of December 31, 2025 are as follows:

 

(In millions of won, CNY)

Collateral

 

Carrying amount

 

Maximum secured amount of credit

 

Secured creditor

 

Collateral borrowings amount

Property, plant and equipment and others

 

217,031

 

780,000

 

Korea Development Bank and others

 

650,000

Property, plant and equipment and others

 

724,965

 

-

 

China Construction Bank Corporation and others

 

CNY 4,500

 

Commitments for asset acquisition

 

The amount committed to acquire property, plant, equipment and intangible assets not recognized on the financial statements as of December 31, 2025 is W908,493 million.

65

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

16.
Share Capital, Share Premium and Reserves

 

(a)
Share capital and Share premium

 

The total number of shares to be issued by the Parent Company is 1,000,000,000 shares, the number of shares issued is 500,000,000 shares (December 31, 2024: 500,000,000 shares), and the par value per share is W5,000. There were no changes in the share capital of the Parent Company for the year ended December 31, 2025.

 

The Parent Company conducted a paid-in capital increase based on the resolution of the board of directors on December 18, 2023, and the newly issued shares were listed on the Korea Exchange (KRX) on March 26, 2024.

 

With the new shares of common stock, the capital stock increased by W710,921 million to W2,500,000 million for the year ended December 31, 2024.

 

Capital surplus as of December 31, 2025 and 2024 are as follows:

 

(In millions of won)

 

 

December 31, 2025

 

December 31, 2024

Share premium

W

2,821,006

 

2,821,006

Other capital surplus

 

(80,195)

 

(47,419)

Total

W

2,740,811

 

2,773,587

 

 

 

 

66

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

16.
Share Capital, Share Premium and Reserves, Continued

 

(b)
Reserves

 

Reserves consist of the following:

 

Foreign currency translation differences for foreign operations

 

Foreign currency translation differences for foreign operations include all foreign currency differences arising from translating the financial statements of the Group’s foreign operations.

 

Other comprehensive income (loss) from associates

 

The other comprehensive income (loss) from associates comprises include the Group’s share of other comprehensive income arising from the amount related to change in equity of investments in equity- method investments.

 

Other comprehensive income (loss) held for sale

 

The other comprehensive income (loss) held for sale comprises the translation reserve from the disposal groups held for sale.

 

Reserves as of December 31, 2025 and 2024 are as follows:

 

(In millions of won)

 

 

 

 

 

 

December 31, 2025

 

December 31, 2024

Foreign currency translation differences for foreign operations

W

1,108,625

 

1,025,319

Other comprehensive loss from associates

 

(27,224)

 

(29,496)

Other comprehensive income held for sale

 

-

 

291,363

Total

W

1,081,401

 

1,287,186

 

The movement in reserves for the years ended December 31, 2025 and 2024 are as follows:

 

 

 

Foreign currency translation differences

 

Other comprehensive income (loss) from associates (excluding remeasurements)

 

Other comprehensive income (loss) held for sale

 

Total

January 1, 2024

W

548,792

 

(32,816)

 

-

 

515,976

Change in reserves

 

476,527

 

3,320

 

291,363

 

771,210

December 31, 2024

W

1,025,319

 

(29,496)

 

291,363

 

1,287,186

January 1, 2025

W

1,025,319

 

(29,496)

 

291,363

 

1,287,186

Change in reserves

 

83,306

 

2,272

 

(291,363)

 

(205,785)

December 31, 2025

W

1,108,625

 

(27,224)

 

-

 

1,081,401

 

 

67

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

17.
Revenue

 

Details of revenue for the years ended December 31, 2025 and 2024 are as follows:

 

(In millions of won)

 

 

 

 

 

 

2025

 

2024

Sales of goods

W

25,567,576

 

26,455,920

Others (*)

 

242,506

 

159,427

Total

W

25,810,082

 

26,615,347

 

(*) Others include royalties and rental revenue.

 

For the year ended December 31, 2025, the revenue recognized by satisfying performance obligation for the amount received from the customer in the prior reporting period is W1,107,611 million (2024: W589,055 million).

 

 

 

68

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

18.
Information about geographical areas and products

 

Details of information of geographical areas and products for the years ended December 31, 2025, and 2024 are as follows:

 

(a)
Revenue by geography (Customer based)

 

(In millions of won)

 

Region

 

2025

 

2024

Domestic

W

990,498

 

1,007,200

Foreign

 

　

 

　

China

 

16,591,815

 

18,150,480

Asia (excluding China)

 

4,540,843

 

3,228,369

North America

 

1,969,811

 

2,282,754

Europe

 

1,717,115

 

1,946,544

Subtotal

W

24,819,584

 

25,608,147

Total

W

25,810,082

 

26,615,347

 

“Company A” and “Company B” accounted for more than 10% of the Group’s revenue for the year ended December 31, 2025, with amounts of W14,835,862 million and W3,412,768 million, respectively (2024: W14,281,844 million and W3,767,278 million, respectively). The aggregated revenues from the Group’s top ten customers accounted for 92% of revenue for the year ended December 31, 2025 (2024: 89%).

 

 

 

69

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

18.
Information about geographical areas and products, Continued

 

(b)
Non-current assets by geography

 

(In millions of won)

 

 

 

 

 

 

 

 

 

 

 

 

Region

 

December 31, 2025

 

December 31, 2024

 

 

Property, plant and equipment

 

Intangible

assets

 

Investment Property

 

Property, plant and equipment

 

Intangible

assets

 

Investment Property

Domestic

W

10,299,102

 

1,427,773

 

18,031

 

11,913,201

 

1,485,876

 

27,911

Foreign

 

 

 

 

 

 

 

 

 

 

 

 

China

 

1,457,884

 

6,816

 

-

 

2,099,653

 

16,792

 

-

Vietnam

 

2,699,577

 

30,249

 

-

 

3,181,152

 

41,574

 

-

Others

 

14,213

 

13,197

 

-

 

8,867

 

14,165

 

-

Subtotal

W

4,171,674

 

50,262

 

-

 

5,289,672

 

72,531

 

-

Total

W

14,470,776

 

1,478,035

 

18,031

 

17,202,873

 

1,558,407

 

27,911

 

(c)
Revenue by products and services

 

(In millions of won)

 

 

 

 

2025

 

2024

TV

W

4,791,384

 

5,972,637

IT

 

9,509,439

 

9,419,615

Mobile and others (*)

 

9,372,982

 

8,942,349

AUTO

 

2,136,277

 

2,280,746

Total (*)

W

25,810,082

 

26,615,347

 

(*) This includes other revenue.

 

For the year ended December 31, 2025, the revenue from OLED products accounted for 61% of the total revenue (2024: 55%).

70

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

19.
The Nature of Expenses

 

The classifications of expenses by nature for the years ended December 31, 2025 and 2024 are as follows:

 

(In millions of won)

 

 

 

 

2025

 

2024

Changes in inventories

W

125,576

 

(143,513)

Purchases of raw materials and others

 

11,866,405

 

12,973,989

Depreciation and amortization

 

4,354,145

 

5,125,637

Outsourcing

 

1,312,558

 

1,159,520

Labor

 

3,595,835

 

3,714,001

Supplies and others

 

954,564

 

987,265

Utility

 

1,286,792

 

1,397,669

Fees and commissions

 

689,309

 

740,863

Freight cost

 

114,144

 

172,081

Advertising

 

61,725

 

67,092

Warranty

 

71,255

 

113,689

Travel

 

41,677

 

53,244

Taxes and dues

 

116,954

 

135,982

Others

 

702,166

 

678,424

Total (*)

W

25,293,105

 

27,175,943

 

(*) Total expenses consist of cost of sales, selling, administrative, research and development expenses.

 

 

71

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

20.
Selling and Administrative Expenses

 

Details of selling and administrative expenses for the years ended December 31, 2025 and 2024 are as follows:

 

(In millions of won)

 

 

 

 

2025

 

2024

Salaries

W

541,898

 

579,784

Post-employment benefit

 

26,370

 

22,596

Other employee benefits

 

79,391

 

84,007

Freight cost

 

76,931

 

119,325

Fees and commissions

 

228,638

 

246,020

Depreciation and amortization

 

222,090

 

266,159

Taxes and dues

 

30,641

 

63,382

Advertising

 

61,725

 

67,092

Warranty

 

71,255

 

113,689

Insurance

 

12,348

 

14,216

Travel

 

11,567

 

13,122

Training

 

7,810

 

9,306

Others

 

78,032

 

89,611

Total

W

1,448,696

 

1,688,309

 

 

 

72

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

21.
Other Non-operating Income and Other Non-operating Expenses

 

(a) Details of other non-operating income for the years ended December 31, 2025 and 2024 are as follows:

 

(In millions of won)

 

 

 

 

2025

 

2024

Foreign currency gain

W

1,701,860

 

1,972,046

Gain on disposal of assets held for sale

 

759,387

 

-

Gain on disposal of property, plant and equipment

 

45,504

 

51,792

Gain on disposal of intangible assets

 

1,592

 

25

Reversal of impairment loss on property, plant and equipment

 

2,317

 

4,314

Others

 

85,490

 

72,266

Total

W

2,596,150

 

2,100,443

 

(b) Details of other non-operating expenses for the years ended December 31, 2025 and 2024 are as follows:

 

(In millions of won)

 

 

 

 

2025

 

2024

Foreign currency loss

W

1,695,524

 

2,479,014

Loss on disposal of property, plant and equipment

 

89,049

 

76,771

Impairment loss on property, plant and equipment

 

161,579

 

98,525

Impairment loss on intangible assets

 

55,292

 

72,490

Others

 

38,007

 

71,181

Total

W

2,039,451

 

2,797,981

 

 

 

 

 

 

73

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

22.
Finance Income and Finance Costs

 

Details of finance income and costs recognized in profit or loss for the years ended December 31, 2025 and 2024 are as follows:

 

(In millions of won)

 

 

 

 

2025

 

2024

Finance income

 

 

 

 

Interest income

W

51,686

 

87,692

Foreign currency gain

 

332,178

 

375,557

Gain on valuation of financial assets at fair value through profit or loss

 

15,677

 

532

Gain on transaction of derivatives

 

162,139

 

274,173

Gain on valuation of derivatives

 

16,002

 

145,078

Others

 

764

 

62

Total

W

578,446

 

883,094

Finance costs

 

 

 

 

Interest expense

W

702,608

 

909,640

Foreign currency loss

 

274,151

 

861,409

Loss on sale of trade accounts and notes receivable

 

20,916

 

26,178

Loss on valuation of financial assets at fair value through profit or loss

 

5,556

 

9,122

Loss on valuation of derivatives

 

139,051

 

5,771

Others

 

10,634

 

9,792

Total

W

1,152,916

 

1,821,912

 

 

 

 

74

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

23. Income Tax Benefit (Expense)

 

(a) Details of income tax benefit (expense) for the years ended December 31, 2025 and 2024 are as follows:

 

(In millions of won)

 

 

 

 

 

 

2025

 

2024

Current tax expense

 

 

 

 

Current year

W

(109,389)

 

(191,865)

Adjustment for prior years

 

(43,785)

 

(32,276)

Subtotal

W

(153,174)

 

(224,141)

Deferred tax benefit

 

　

 

　

Changes in temporary differences

W

(44,708)

 

6,381

Income tax expense

W

(197,882)

 

(217,760)

(b) Details of income tax benefit (expense) recognized in equity for the years ended December 31, 2025 and 2024 are as follows:

 

(In millions of won)

 

2025

 

2024

 

 

Before tax

 

Income tax effect

 

Net of tax

 

Before tax

 

Income tax effect

 

Net of tax

Remeasurements of net defined benefit liabilities (assets)

W

81,177

 

(7,065)

 

74,112

 

(154,203)

 

22,368

 

(131,835)

Foreign currency translation differences

 

(256,803)

 

72,373

 

(184,430)

 

997,729

 

(71,092)

 

926,637

Acquisition of non-controlling shareholders' interests in subsidiaries

 

(18,683)

 

(14,093)

 

(32,776)

 

(61,512)

 

14,093

 

(47,419)

Change in equity of equity method investee

 

2,800

 

(528)

 

2,272

 

3,235

 

-

 

3,235

Total

W

(191,509)

 

50,687

 

(140,822)

 

785,249

 

(34,631)

 

750,618

 

 

 

75

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

23. Income Tax Benefit (Expense), Continued

 

(c) Reconciliation of the effective tax rate for the years ended December 31, 2025 and 2024 is as follows:

 

(In millions of won)

 

 

 

 

 

 

 

 

2025

 

2024

Profit (loss) for the year

W

 

303,807

 

(2,409,300)

Income tax expense

 

 

(197,882)

 

(217,760)

Profit (loss) before income tax

 

 

501,689

 

(2,191,540)

Income tax benefit using the statutory tax rate of each country

 

 

(80,069)

 

527,019

Income not subject to tax (Expenses not deductible for tax purposes)

 

 

(25,777)

 

2,704

Tax credit

 

 

18,081

 

22,854

Change in unrecognized deferred tax assets (*1)

 

 

273,296

 

(703,714)

Adjustment for prior years

 

 

(43,785)

 

(13,807)

Effect on change in tax rate

 

 

(337,974)

 

(54,821)

Others

 

 

(1,654)

 

2,005

Total

W

 

(197,882)

 

(217,760)

Effective tax rate

 

 

39.4%

 

(*2)

 

(*1) The effect of changes in deferred tax assets related to tax loss carryforwards and tax credit carryforwards that are not realizable based on the estimates of future taxable profit.

(*2) Actual effective tax rate is not calculated due to loss before income tax for the year ended December 31, 2024.

.

 

(d) Global Minimum Tax

 

Under Pillar Two legislation, the Group is liable to pay a top-up tax for the difference between the GloBE effective tax rate per jurisdiction and the 15% minimum rate. The Group has assessed its impact of the Pillar Two legislation on its financial statements. As a result of the assessment, current tax expenses is recognized for W7,570 million for the year ended December 31, 2025.

 

 

76

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

24.
Deferred Tax Assets and Liabilities

 

(a) Details of the recovery and settlement timings for deferred tax assets and liabilities as of December 31, 2025 and 2024 are as follows:

 

(In millions of won)

 

 

 

 

 

 

2025

 

2024

Deferred tax assets

 

 

 

 

Deferred tax asset to be recovered after more than 12 months

W

3,703,599

 

3,694,831

Deferred tax asset to be recovered within 12 months

 

372,278

 

493,850

Total deferred tax assets

 

4,075,877

 

4,188,681

Deferred tax liabilities

 

 

 

 

Deferred tax liability to be settled after more than 12 months

W

455,001

 

496,851

Deferred tax liability to be settled within 12 months

 

110,720

 

187,653

Total deferred tax liabilities

 

565,721

 

684,504

Deferred tax assets after offsetting

W

3,510,156

 

3,504,177

 

 

77

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

24.
Deferred Tax Assets and Liabilities, Continued

 

(b) Changes in deferred tax assets and liabilities for the years ended December 31, 2025 and 2024 are as follows:

 

(In millions of won)

 

 

January 1, 2024

 

Profit or loss for 2024

 

Other comprehensive income (loss) and others for 2024

 

Classified as held for sale

 

 

 

December 31, 2024

 

Profit or loss for 2025

 

Other comprehensive income (loss) and others for 2025

 

 

 

December 31, 2025

Other accounts

 Receivable

W

(61)

 

(4,409)

 

-

 

-

 

(4,470)

 

(4,056)

 

-

 

(8,526)

Inventories

 

51,728

 

12,897

 

-

 

(1,498)

 

63,127

 

24,610

 

-

 

87,737

Defined benefits assets

and others

 

(89,753)

 

53,721

 

22,368

 

-

 

(13,664)

 

(26,541)

 

(7,065)

 

(47,270)

Subsidiaries and associates

 

(89,649)

 

(3,731)

 

(56,999)

 

-

 

(150,379)

 

(25,231)

 

57,752

 

(117,858)

Accrued expenses

 

97,867

 

8,902

 

-

 

(176)

 

106,593

 

28,090

 

-

 

134,683

Property, plant and equipment and intangible Assets

 

577,308

 

(58,721)

 

-

 

60,747

 

579,334

 

(200,533)

 

-

 

378,801

Provisions

 

39,586

 

(4,666)

 

-

 

-

 

34,920

 

(2,151)

 

-

 

32,769

Other temporary differences

 

58,731

 

(8,413)

 

-

 

(15,100)

 

35,218

 

(11,584)

 

-

 

23,634

Tax loss carryforwards

 

2,766,820

 

14,365

 

-

 

(72,338)

 

2,708,847

 

162,117

 

-

 

2,870,964

Tax credit carryforwards

 

148,215

 

(3,564)

 

-

 

-

 

144,651

 

10,571

 

-

 

155,222

Deferred tax assets (liabilities)

W

3,560,792

 

6,381

 

(34,631)

 

(28,365)

 

3,504,177

 

(44,708)

 

50,687

 

3,510,156

 

78

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

24.
Deferred Tax Assets and Liabilities, Continued

 

(c) Details of deductible (taxable) temporary difference, tax credit carryforwards and tax loss carryforwards unrecognized as deferred tax assets (liabilities) as of December 31, 2025, are as follows:

 

(In millions of won)

 

 

 

 

 

 

Amount

 

Reason

Investments with its subsidiary

W

(1,115,322)

 

Unlikely to reverse (dispose of) in the foreseeable future

Tax credit carryforwards (*1)

 

1,081,726

 

Uncertainty of future taxable profit

Tax loss carryforwards (*2)

 

2,021,561

 

Uncertainty of future taxable profit

 

(*1) Unrecognized tax credit carryforwards due to the low probability of realization in the future as of December 31, 2025, will be expired from 2026.

(*2) Unrecognized tax loss carryforwards due to the low probability of realization in the future as of December 31, 2025, will be expired from 2039.

79

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

25.
Earnings (Loss) Per Share

 

(a)
Basic earnings (loss) per share for the years ended December 31, 2025 and 2024 are as follows:

 

(In won and number of shares)

 

 

 

 

 

 

2025

 

2024

Profit (loss) for the year

W

226,311,788,315

 

(2,562,606,429,762)

Weighted-average number of common shares outstanding

 

500,000,000

 

471,252,355

Basic earnings (loss) per share

W

453

 

(5,438)

 

Due to paid-in capital increase for the year ended December 31, 2024, the number of outstanding shares has increased.

 

(b) Diluted earnings (loss) per share is not different from basic earnings (loss) per share as there are no dilution effects of potential common stocks.

 

 

 

 

80

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

26.
Financial Risk Management

 

The Group is exposed to credit risk, liquidity risk and market risk. The Group identifies and analyzes such risks, and controls are implemented under a risk management system to monitor and manage these risks at below an acceptable level.

 

(a) Market risk

 

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices, which will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

 

(i) Currency risk

 

The Group is exposed to currency risk on sales, purchases and borrowings that are denominated in a currency other than the functional currency. The currencies in which these transactions primarily are denominated are USD and JPY, etc.

 

The Group adopts policies to ensure that its net exposure is kept to a manageable level by buying or selling foreign currencies at spot rates when necessary to address short-term imbalances in foreign currency cash inflows and outflows. In respect of monetary assets and liabilities denominated in foreign currencies, the Group manages currency risk through continuously managing the position of foreign currencies, measuring the currency risk and, if necessary, using derivatives such as currency forwards, currency swap and others.

 

Cross currency interest rate swap contracts, USD 580 million (December 31, 2024: USD 500 million) and CNY 380 million (December 31, 2024: CNY 726 million) were entered into to manage currency risk with respect to foreign currency denominated borrowings and USD 1,020 million (December 31, 2024: USD 980 million) were entered into to manage currency risk and interest rate risk with respect to foreign currency denominated borrowings and bonds.

 

The currency forward exchange contracts entered into to manage foreign exchange risk related to advances received in foreign currency expired during the reporting period, and there is no outstanding balance as of December 31, 2025 (December 31, 2024: USD 750 million).

 

81

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

26.
Financial Risk Management, Continued

 

A weaker won, as indicated below, against the following currencies which comprise the Group’s financial assets or liabilities denominated in a foreign currency as of December 31, 2025 and 2024, would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis is based on foreign currency exchange rate variances that the Group considers to be reasonably possible at the end of the reporting period. The sensitivity analysis assumes that all other variables, in particular interest rates, would remain constant. The changes in profit or loss before income tax would have been as follows:

 

(In millions of won)

 

 

 

 

 

 

December 31, 2025

 

December 31, 2024

USD (5 percent weakening)

W

21,011

 

(35,868)

JPY (5 percent weakening)

 

(5,434)

 

(6,645)

 

If the exchange rates for the currencies presented above were to decrease at the end of the reporting period, with all other variables held constant, the effects would be the opposite of those presented above.

 

 

82

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

26.
Financial Risk Management, Continued

 

(ii) Interest rate risk

 

Interest rate risk arises principally from the Group’s variable interest-bearing bonds and borrowings. The Group establishes and applies its policy to reduce uncertainty arising from fluctuations in interest rates and to minimize finance cost and manage interest rate risk by monitoring trends of fluctuations in interest rate and establishing plan for countermeasures. Meanwhile, the Group entered into cross currency interest rate swap contracts amounting to USD 1,020 million (Equivalent to W1,463,598 million) and interest rate swap contracts amounting to USD 250 million (Equivalent to W 358,725 million) and W2,280,000 million in notional amount to hedge interest rate risk with respect to variable interest-bearing borrowings.

 

i) Profile

 

The interest rate profile of the Group’s interest-bearing financial instruments as of December 31, 2025 and 2024 is as follows:

 

(In millions of won)

 

December 31, 2025

 

December 31, 2024

 

 

 

 

 

Fixed rate instruments

 

 

 

 

Financial assets

W

1,572,658

 

2,023,710

Financial liabilities

 

(2,548,213)

 

(4,722,962)

Total

W

(975,555)

 

(2,699,252)

Variable rate instruments

 

 

 

 

Financial liabilities

W

(10,115,925)

 

(9,827,152)

 

 

ii) Profit or loss before income tax sensitivity analysis for variable rate instruments

 

As of December 31, 2025 and 2024, a change of 100 basis points in interest rates at the reporting date would have increased (decreased) profit or loss before income tax by the amounts shown below for the respective following 12 month periods. This analysis assumes that all other variables, in particular foreign currency rates, remain constant.

 

(In millions of won)

 

Profit or loss before income tax

 

 

1%p increase

 

1%p decrease

December 31, 2025

 

 

 

 

Variable rate instruments

W

(101,159)

 

101,159

December 31, 2024

 

 

 

 

Variable rate instruments

W

(98,272)

 

98,272

 

 

 

 

 

 

83

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

26.
Financial Risk Management, Continued

 

(b) Credit risk

 

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s receivables from customers.

 

The Group’s exposure to credit risk of trade and other receivables is influenced mainly by the individual characteristics of each customer. However, management believes that the default risk of the country in which each customer operates, does not have a significant influence on credit risk since the majority of the customers are global electronic appliance manufacturers operating in global markets.

 

The Group establishes credit limits for each customer and each new customer is analyzed quantitatively and qualitatively before determining whether to utilize third party guarantees, insurance or factoring as appropriate.

 

In relation to the impairment of financial assets subsequent to initial recognition, the Group recognizes the changes in expected credit loss (“ECL”) in profit or loss at each reporting date.

 

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk as of December 31, 2025 and 2024 are as follows:

 

(In millions of won)

 

 

 

 

 

 

December 31, 2025

 

December 31, 2024

Financial assets carried at amortized cost

 

 

 

 

Cash equivalents

W

1,572,058

 

2,021,640

Deposits in banks

 

611

 

611

Trade accounts and notes receivable, net

 

2,136,774

 

2,500,608

Non-trade receivables, net

 

145,426

 

227,477

Accrued income, net

 

34,987

 

22,552

Deposits

 

14,549

 

16,747

Loans

 

13,318

 

37,143

Subtotal

 

3,917,723

 

4,826,778

Other financial assets

 

 

 

 

Lease receivables

W

7,406

 

10,063

Financial assets at fair value through profit or loss

 

 

 

　

Convertible securities

W

-

 

1,470

Derivatives

 

131,987

 

256,251

Subtotal

W

131,987

 

257,721

Financial assets at fair value through

 other comprehensive profit or loss

 

 

 

 

Trade accounts and notes receivable, net

W

222,410

 

1,123,869

Financial assets effective for fair value hedging

 

 

 

 

Derivatives

W

-

 

119,098

Total

W

4,279,526

 

6,337,529

 

 

84

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

26.
Financial Risk Management, Continued

 

Trade accounts and notes receivable are insured in order for the Group to manage credit risk if they do not meet the Group’s internal credit ratings. Uninsured trade accounts and notes receivable are managed by continuous monitoring of internal credit rating standards established by the Group and seeking insurance coverage, if necessary.

 

 

(c) Liquidity risk

 

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or other financial assets. The Group’s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

 

The Group has historically been able to satisfy its cash requirements from cash flows from operations and debt and equity financing.

 

Meanwhile, the Group has entered into borrowing facility agreements with several banks. These agreements may include financial covenants requiring the Group to meet certain financial performance targets. The Group periodically monitors compliance with these agreements through its internal control procedures to proactively manage liquidity risk.

 

 

 

85

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

26.
Financial Risk Management, Continued

i) Contractual cash flows of financial liabilities

 

The following are the contractual maturities of financial liabilities, including estimated interest payments, as of December 31, 2025 and 2024.

 

(i) As of December 31, 2025

 

(In millions of won)

 

 

 

Contractual cash flows

 

 

Carrying

amount

 

 

Total

 

6 months or less

 

6-12 months

 

1-2 years

 

2-5 years

 

More than

5 years

Non-derivative financial liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Borrowings

W

12,141,044

 

12,946,309

 

2,537,318

 

1,236,157

 

4,624,773

 

4,548,061

 

-

Bonds

 

523,094

 

538,548

 

198,654

 

213,751

 

126,143

 

-

 

-

Trade accounts and notes payable (*)

 

3,307,687

 

3,307,687

 

3,307,687

 

-

 

-

 

-

 

-

Other accounts payable (*)

 

1,461,014

 

1,462,662

 

1,432,529

 

30,133

 

-

 

-

 

-

Long-term other accounts payable

 

218,683

 

248,238

 

-

 

-

 

67,441

 

180,797

 

-

Security deposits received

 

138,384

 

147,478

 

480

 

4,109

 

142,864

 

25

 

-

Lease liabilities

 

59,678

 

62,604

 

23,122

 

14,889

 

10,342

 

14,095

 

156

Derivative financial liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives

W

9,553

 

7,157

 

3,027

 

2,416

 

1,792

 

(78)

 

-

Cash outflow

 

-

 

325,920

 

18,751

 

13,131

 

292,017

 

2,021

 

-

Cash inflow

 

-

 

(318,763)

 

(15,724)

 

(10,715)

 

(290,225)

 

(2,099)

 

-

Total

W

17,859,137

 

18,720,683

 

7,502,817

 

1,501,455

 

4,973,355

 

4,742,900

 

156

 

(*) As of December 31, 2025, it includes W704,529 million of payable to credit card companies for utility expenses and others paid using business credit card for purchases.

 

86

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

26.
Financial Risk Management, Continued

 

(ii) As of December 31, 2024

 

(In millions of won)

 

 

 

Contractual cash flows

 

 

Carrying

amount

 

 

Total

 

6 months

or less

 

6-12 months

 

1-2 years

 

2-5 years

 

More than

5 years

Non-derivative financial liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Borrowings

W

13,412,275

 

14,453,995

 

3,730,807

 

2,609,727

 

3,941,215

 

4,146,933

 

25,313

Bonds

 

1,137,839

 

1,185,892

 

631,539

 

11,638

 

416,573

 

126,142

 

-

Trade accounts and notes payable (*)

 

4,156,149

 

4,156,149

 

3,884,788

 

271,361

 

-

 

-

 

-

Other accounts payable (*)

 

1,720,670

 

1,723,867

 

1,404,896

 

318,971

 

-

 

-

 

-

Long-term other accounts payable

 

279,774

 

323,400

 

-

 

-

 

69,090

 

192,570

 

61,740

Security deposits received

 

160,713

 

189,214

 

-

 

808

 

6,841

 

181,565

 

-

Lease liabilities

 

57,975

 

60,653

 

23,948

 

12,681

 

13,889

 

9,423

 

712

Derivative financial liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives

W

10,768

 

11,184

 

930

 

3,447

 

4,495

 

2,312

 

-

Cash outflow

 

-

 

75,016

 

21,402

 

20,467

 

22,342

 

10,805

 

-

Cash inflow

 

-

 

(63,832)

 

(20,472)

 

(17,020)

 

(17,847)

 

(8,493)

 

-

Total

W

20,936,163

 

22,104,354

 

9,676,908

 

3,228,633

 

4,452,103

 

4,658,945

 

87,765

 

(*) As of December 31, 2024, it includes W1,187,450 million of payable to credit card companies for utility expenses and others paid using business credit card for purchases.

 

It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different amounts.

 

 

87

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

26.
Financial Risk Management, Continued

 

ii) Supplier Finance Arrangement

 

Supplier finance arrangements are characterized by one or more finance providers offering to pay amounts that the Group owes its suppliers and the Group agreeing to pay finance providers according to the terms and conditions of the arrangements at a date later than, when suppliers are paid. These arrangements provide the Group with extended payment terms, or the Group’s suppliers with early payment terms, compared to the related invoice payment due date.

 

The carrying amounts of financial liabilities from supplier financing agreement as of December 31, 2025 and 2024 are as follows:

 

(In millions of won)

 

December 31, 2025

 

December 31, 2024

 

 

Trade accounts and notes payable

 

Other Accounts Payable

 

Trade accounts and notes payable

 

Other Accounts Payable

Liabilities under supplier finance arrangement

 

 

 

 

 

 

 

 

Purchase Card (*1)

W

474,781

 

219,697

 

778,535

 

366,853

Electronic Trade Receivable-Secured Loan (*2)

 

53,667

 

142,872

 

90,328

 

164,741

Liabilities under supplier finance arrangement of which the supplier has received payment from the finance provider

 

 

 

 

 

 

 

 

Purchase Card (*1)

W

474,781

 

219,697

 

778,535

 

366,853

Electronic Trade Receivable-Secured Loan (*2)

 

2,138

 

12,465

 

2,443

 

2,952

 

(*1) The Group pays the settlement amount to the card company on the end date of credit term according to the card agreement. The Group uses purchase cards in agreement with the supplier, the amount paid to the card company is for the purchase of goods or services incurred in the normal course of business, with no change in the underlying purpose of the transaction, and the payment deadline to the card company falls within the normal business cycle of one year or less, and no collateral is provided in connection with this agreement. Therefore, it is classified as trade accounts and notes payable and other account payable and presented as operating and investing activities in the cash flow statement.

 

(*2) The Group enters into supplier financial agreement with financial institutions to streamline the payment process and offer early payment terms to suppliers. Under the supplier financial agreement, if a vendor that supplied goods or services to the Group transfers its account receivables to the financial institution within the payment due date, the Group pays the amount to the financial institution. There is no change in the original debt recognized as trade accounts and notes payable or other account payable because the supplier financial agreement does not result in a substantive reduction of the Group’s payment obligation or a change in payment terms.

 

88

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

26.
Financial Risk Management, Continued

The range of payment due dates as of December 31, 2025 and 2024 are as follows:

 

 

 

December 31, 2025

 

December 31, 2024

Liabilities under supplier finance arrangement

 

 

 

 

Purchase Card

 

91~205 days

 

270~288 days

Electronic Trade Receivable-Secured Loan

 

45~123 days

 

45~123 days

Trade accounts and notes payable not covered by the supplier finance agreement

 

5~123 days

 

3~123 days

 

There were no material business combinations or foreign exchange differences that would affect the liabilities under the supplier finance arrangement.

89

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

26.
Financial Risk Management, Continued

 

(d)
Capital management

 

Management’s policy is to maintain a capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Liabilities to equity ratio, net borrowings to equity ratio and other financial ratios are used by management to achieve an optimal capital structure. Management also monitors the return on capital as well as the level of dividends to ordinary shareholders. The Group is also responsible for complying with certain financial ratios as part of capital maintenance conditions imposed externally. To fulfill this responsibility, the Group regularly monitors these financial ratios and takes proactive measures when necessary.

 

(In millions of won)

 

 

 

 

 

 

December 31, 2025

 

December 31, 2024

Total liabilities

W

19,077,462

 

24,786,759

Total equity

 

7,839,238

 

8,072,807

Cash and deposits in banks (*1)

 

1,572,658

 

2,022,240

Borrowings (including bonds)

 

12,664,138

 

14,550,114

Total liabilities to equity ratio

 

243%

 

307%

Net borrowings to equity ratio (*2)

 

141%

 

155%

(*1) Cash and deposits in banks consist of cash and cash equivalents and current deposits in banks.

 

(*2) Net borrowings to equity ratio is calculated by dividing total borrowings (including bonds and excluding lease liabilities and others) less cash and current deposits in banks by total equity.

 

 

(e)
Determination of fair value

 

(i)
Measurement of fair value

 

A number of the Group’s accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.

 

 

90

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

26.
Financial Risk Management, Continued

 

(ii) Fair values versus carrying amounts

 

The fair values of financial assets and liabilities, together with the carrying amounts as of December 31, 2025 and 2024 are as follows:

 

(In millions of won)

 

December 31, 2025

 

December 31, 2024

 

 

Carrying amounts

 

Fair values

 

Carrying amounts

 

Fair values

Financial assets carried at amortized cost

 

 

 

 

 

 

 

 

Cash and cash equivalents

W

1,572,058

 

(*1)

 

2,021,640

 

(*1)

Deposits in banks

 

611

 

(*1)

 

611

 

(*1)

Trade accounts and notes receivable, net

 

2,136,774

 

(*1)

 

2,500,608

 

(*1)

Non-trade receivables, net

 

145,426

 

(*1)

 

227,477

 

(*1)

Accrued income, net

 

34,987

 

(*1)

 

22,552

 

(*1)

Deposits

 

14,549

 

(*1)

 

16,747

 

(*1)

Loans

 

13,318

 

(*1)

 

37,143

 

(*1)

Financial assets at fair value through profit or loss

 

 

 

 

 

 

 

 

Equity instruments

W

124,316

 

124,316

 

120,501

 

120,501

Convertible securities

 

-

 

-

 

1,470

 

1,470

Derivatives

 

131,987

 

131,987

 

256,251

 

256,251

Financial assets at fair value through other comprehensive profit or loss

 

 

 

 

 

 

 

 

Trade accounts and notes receivable, net

W

222,410

 

(*1)

 

1,123,869

 

(*1)

Financial assets effective for fair value hedging

 

 

 

 

 

 

 

 

Derivatives

W

-

 

-

 

119,098

 

119,098

Other financial assets

 

 

 

 

 

 

 

 

Lease receivables

 

7,406

 

(*1)

 

10,063

 

(*1)

Financial liabilities carried at amortized cost

 

 

 

 

 

 

 

 

Borrowings

W

12,141,044

 

12,170,751

 

13,412,275

 

13,482,726

Bonds

 

523,094

 

523,500

 

1,137,839

 

1,142,725

Trade accounts and notes payable

 

3,307,687

 

(*1)

 

4,156,149

 

(*1)

Other accounts payable

 

1,679,697

 

(*1)

 

2,000,444

 

(*1)

Security deposits received

 

138,384

 

(*1)

 

160,713

 

(*1)

Financial liabilities at fair value through profit or loss

 

 

 

 

 

 

 

 

Derivatives

W

9,553

 

9,553

 

10,768

 

10,768

Other financial liabilities

 

 

 

 

 

 

 

 

Lease liabilities

W

59,678

 

(*2)

 

57,975

 

(*2)


(*1) Excluded from disclosures as the carrying amount approximates fair value.
(*2) Excluded from the fair value disclosures in accordance with Korean IFRS 1107 ‘Financial Instruments: Disclosures’.

91

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

26.
Financial Risk Management, Continued

 

(iii) Fair values of financial assets and liabilities

 

i) Fair value hierarchy

 

Financial instruments carried at fair value are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques. The different levels have been defined as follows:

 

▪
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
▪
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or

liability, either directly or indirectly

▪
Level 3: inputs for the asset or liability that are not based on observable market data

 

The Group measures fair value for financial reporting purposes, including fair value measurements, which are classified as “Level 3”. The Group consults on the fair value assessment process and its results in accordance with the financial reporting schedule, and recognizes changes in the "level" at the end of the reporting period when there is a change in events or circumstances that cause a shift between fair value levels.

 

 

 

92

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

26.
Financial Risk Management, Continued

 

ii) Assets and liabilities measured at fair value

 

Fair value hierarchy classifications of the financial instruments that are measured at fair value as of December 31, 2025 and 2024 are as follows:

 

(In millions of won)

 

December 31, 2025

 

Total

Classification

 

Level 1

 

Level 2

 

Level 3

 

 

 

Financial assets at fair value through profit or loss

 

 

Equity instruments

W

21,008

 

-

 

103,308

 

124,316

 

Derivatives

 

-

 

131,987

 

-

 

131,987

 

Financial liabilities at fair value through profit or loss

 

 

Derivatives

W

-

 

9,553

 

-

 

9,553

 

(In millions of won)

 

December 31, 2024

 

Total

Classification

 

Level 1

 

Level 2

 

Level 3

 

 

 

Financial assets at fair value through profit or loss

 

 

Equity instruments

W

18,958

 

-

 

101,543

 

120,501

 

Convertible securities

 

-

 

-

 

1,470

 

1,470

 

Derivatives

 

-

 

256,251

 

-

 

256,251

 

Financial assets effective for fair value hedging

 

 

 

 

 

 

 

 

 

Derivatives

W

-

 

119,098

 

-

 

119,098

 

Financial liabilities at fair value through profit or loss

 

 

Derivatives

W

-

 

10,768

 

-

 

10,768

 

 

 

 

 

93

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

26.
Financial Risk Management, Continued

 

The valuation techniques and inputs for assets and liabilities measured at fair value that are classified as Level 2 and Level 3 within the fair value hierarchy as of December 31, 2025 and 2024 are as follows:

 

(In millions of won)

 

December 31, 2025

 

December 31, 2024

 

Valuation technique

 

Input

Classification

 

Level 2

 

Level 3

 

Level 2

 

Level 3

 

 

 

 

Financial assets at fair value through profit or loss

 

 

 

 

 

 

 

 

 

 

 

 

Equity instruments

W

-

 

103,308

 

-

 

101,543

 

Net asset value method and Comparable company analysis

 

Price to book value ratio

Convertible securities

 

-

 

-

 

-

 

1,470

 

Risk-adjusted discount model and binominal option pricing model

 

Discount rate, stock price and volatility

Derivatives

 

131,987

 

-

 

256,251

 

-

 

Discounted cash flow

 

Discount rate and Exchange rate

Financial assets effective for fair value hedging

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives

W

-

 

-

 

119,098

 

-

 

Discounted cash flow

 

Discount rate and Exchange rate

Financial liabilities at fair value through profit or loss

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives

W

9,553

 

-

 

10,768

 

-

 

Discounted cash flow

 

Discount rate and Exchange rate

 

 

 

 

94

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

26.
Financial Risk Management, Continued

 

iii) Financial instruments not measured at fair value but for which the fair value is disclosed

 

Fair value hierarchy classifications, valuation techniques and inputs for fair value measurements of the financial instruments not measured at fair value but for which the fair value is disclosed as of December 31, 2025 and 2024 are as follows:

 

 

(In millions of won)

 

December 31, 2025

 

Valuation technique

 

Input

Classification

 

Level 1

 

Level 2

 

Level 3

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

Borrowings

W

-

 

-

 

12,170,751

 

Discounted cash flow

 

Discount rate

 

Bonds

 

-

 

-

 

523,500

 

Discounted cash flow

 

Discount rate

 

 

(In millions of won)

 

December 31, 2024

 

Valuation technique

 

Input

Classification

 

Level 1

 

Level 2

 

Level 3

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

Borrowings

W

-

 

-

 

13,482,726

 

Discounted cash flow

 

Discount rate

 

Bonds

 

-

 

-

 

1,142,725

 

Discounted cash flow

 

Discount rate

 

 

 

iv) The interest rates applied for determination of the above fair value as of December 31, 2025 and 2024 are as follows:

 

 

 

December 31, 2025

 

December 31, 2024

Borrowings, bonds and others

 

3.32%~3.90%

 

3.70%~3.96%

 

 

 

 

 

 

 

 

 

95

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

26.
Financial Risk Management, Continued

 

 

v) There is no transfer between Level 1, Level 2 and Level 3 for the years ended December 31, 2025 and 2024, and the changes in financial assets classified as Level 3 of fair value measurements for the years ended December 31, 2025 and 2024 are as follows:

 

(In millions of won)

Classification

 

January 1, 2025

 

Acquisition

 

Disposal

 

Valuation

 

Changes in Foreign Exchange Rates

 

December 31, 2025

Equity instruments

W

101,543

 

1,422

 

-

 

2,914

 

(2,571)

 

103,308

Convertible securities

 

1,470

 

-

 

(1,399)

 

-

 

(71)

 

-

 

 

 

(In millions of won)

Classification

 

January 1, 2024

 

Acquisition

 

Disposal

 

Valuation

 

Changes in Foreign Exchange Rates

 

December 31, 2024

Equity instruments

W

87,027

 

5,470

 

(128)

 

(2,809)

 

11,983

 

101,543

Convertible securities

 

3,127

 

 -

 

(1,838)

 

-

 

181

 

1,470

 

 

 

 

96

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

26.
Financial Risk Management, Continued

 

(f) Net gains and losses by category of financial instruments

 

The net gains and losses by category of financial instruments for the years ended December 31, 2025 and 2024 are as follows:

 

(In millions of won)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2025

 

 

Financial assets at amortized cost

 

Financial liabilities at amortized cost

 

Financial assets at FVTPL

 

Financial assets at FVOCI

 

Derivatives

 

Others

 

Total

Interest income

W

51,420

 

-

 

-

 

 -

 

 -

 

266

 

51,686

Interest expense

 

-

 

(700,214)

 

-

 

 -

 

 -

 

(2,394)

 

(702,608)

Foreign currency differences

 

(367,983)

 

454,997

 

-

 

 -

 

(22,646)

 

 -

 

64,368

Bad debt expense

 

107

 

 -

 

-

 

 -

 

-

 

-

 

107

Gain or loss on disposal

 

(7,062)

 

-

 

497

 

(13,854)

 

 -

 

 -

 

(20,419)

Gain or loss on valuation

 

-

 

-

 

7,343

 

 -

 

 -

 

 -

 

7,343

Gain or loss on derivatives

 

-

 

-

 

-

 

-

 

34,935

 

 -

 

34,935

Dividend income

 

-

 

-

 

266

 

-

 

-

 

-

 

266

Total

W

(323,518)

 

(245,217)

 

8,106

 

(13,854)

 

12,289

 

(2,128)

 

(564,322)

 

(In millions of won)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2024

 

 

Financial assets at amortized cost

 

Financial liabilities at amortized cost

 

Financial assets at FVTPL

 

Financial assets at FVOCI

 

Derivatives

 

Others

 

Total

Interest income

W

87,510

 

-

 

-

 

-

 

-

 

182

 

87,692

Interest expense

 

-

 

(906,766)

 

-

 

-

 

-

 

(2,874)

 

(909,640)

Foreign currency differences

 

1,189,874

 

(2,238,150)

 

-

 

-

 

190,906

 

-

 

(857,370)

Reversal of bad debt expense

 

(689)

 

-

 

-

 

-

 

-

 

-

 

(689)

Gain or loss on disposal

 

(7,708)

 

-

 

(109)

 

(18,470)

 

-

 

-

 

(26,287)

Gain or loss on valuation

 

-

 

-

 

(8,590)

 

-

 

-

 

-

 

(8,590)

Gain or loss on repayment

 

 

 

(678)

 

-

 

-

 

-

 

-

 

(678)

Gain or loss on derivatives

 

-

 

-

 

-

 

 -

 

413,480

 

-

 

413,480

Total

W

1,268,987

 

(3,145,594)

 

(8,699)

 

(18,470)

 

604,386

 

(2,692)

 

(1,302,082)

 

97

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

27. Leases

 

(a) Leases as lessee

 

The Group leases buildings, vehicles, machinery and equipment and others. Information about leases for which the Group is a lessee is presented below.

(i) Right-of-use assets

 

Right-of-use assets related to leased properties that do not meet the definition of investment property are presented as property, plant and equipment(see Note 9(a)).

 

Changes in right-of-use assets for the years ended December 31, 2025 and 2024 are as follows:

 

(In millions of won)

 

 

2025

 

 

Buildings and structures

 

Land

 

Machinery

and equipment

 

Vehicles

 

Others

 

Total

At January 1

W

28,152

 

51,012

 

1,750

 

6,497

 

1,522

 

88,933

Acquisitions

 

54,542

 

75

 

954

 

4,100

 

126

 

59,797

Depreciation

 

(44,366)

 

(2,479)

 

(2,024)

 

(5,234)

 

(698)

 

(54,801)

Gain or loss on foreign

currency translation

 

1,295

 

3,697

 

32

 

303

 

492

 

5,819

At December 31

W

39,623

 

52,305

 

712

 

5,666

 

1,442

 

99,748

 

(In millions of won)

 

 

2024

 

 

Buildings and structures

 

Land

 

Machinery

and equipment

 

Vehicles

 

Others

 

Total

At January 1

W

57,946

 

51,249

 

714

 

7,439

 

1,898

 

119,246

Acquisitions

 

24,008

 

1

 

2,658

 

7,044

 

154

 

33,865

Depreciation

 

(56,080)

 

(3,063)

 

(1,645)

 

(6,879)

 

(778)

 

(68,445)

Gain or loss on foreign

currency translation

 

13,877

 

8,410

 

23

 

456

 

292

 

23,058

Classified as held for sale

 

(11,599)

 

(5,585)

 

-

 

(1,563)

 

(44)

 

(18,791)

At December 31

W

28,152

 

51,012

 

1,750

 

6,497

 

1,522

 

88,933


 

98

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

27. Leases, Continued

 

(ii) Amounts recognized in profit or loss not from right-of-use assets for the years ended December 31, 2025 and 2024 are as follows:

 

(In millions of won)

 

 

 

 

 

 

2025

 

2024

Interest on lease liabilities

W

(2,394)

 

(2,874)

Income from sub-leasing right-of-use assets

 

266

 

182

Expenses relating to short-term leases

 

(208)

 

(274)

Expenses relating to leases of low-value assets that are not short-term leases

 

(436)

 

(543)

 

(iii) Changes in lease liabilities for the years ended December 31, 2025 and 2024 are as follows:

 

(In millions of won)

 

 

 

 

 

 

2025

 

2024

At January 1

W

57,975

 

73,364

 Additions and others

 

54,605

 

55,619

 Interest expense

 

2,394

 

2,874

  Repayment of liabilities

 

(55,296)

 

(73,882)

At December 31

W

59,678

 

57,975

 

(iv) Total cash outflow from leases for the year ended December 31, 2025 amounted to W55,674 million (2024: W74,517 million).

 

(b) Leases as lessor

 

(i) Finance lease

 

The amount recognized as interest income on lease receivables during the year ended December 31, 2025 is W266 million (2024: W182 million).

 

The following table sets out a maturity analysis of lease receivables, showing the undiscounted lease payments to be received after the reporting date.

 

(In millions of won)

 

 

 

 

 

 

December 31, 2025

 

December 31, 2024

6 months or less

W

3,703

 

3,255

6-12 months

 

946

 

3,255

1-2 years

 

787

 

3,797

2-5 years

 

2,291

 

-

 Total undiscounted lease payments

W

7,727

 

10,307

 Unearned finance income

 

(321)

 

(244)

Net Investment in the lease

W

7,406

 

10,063

 

(ii) Operating lease

 

The Group leases out investment property and a portion of property, plant and equipment as operating leases (see Notes 9 and 11).

 

99

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

28.
Cash Flow Information

(a) Details of cash flows generated from operations for the years ended December 31, 2025 and 2024 are as follows:

(In millions of won)

2025

2024

Profit (loss) for the year

W

303,807

(2,409,300)

Adjustments for:

W

  Income tax expense (Note 23)

197,882

217,760

  Depreciation and amortization (Note 19)

4,354,145

5,125,637

  Gain on foreign currency translation

(46,390)

(587,019)

  Loss on foreign currency translation

320,723

979,061

  Post-employment benefit (Note 13)

130,315

130,014

  Gain on disposal of assets held for sale

(759,387)

-

  Gain on disposal of property, plant and equipment

(45,504)

(51,792)

  Loss on disposal of property, plant and equipment

89,049

76,771

  Impairment loss on property, plant and equipment

161,579

98,525

  Gain on disposal of intangible assets

 

(1,592)

 

(25)

  Loss on disposal of intangible assets

 

-

 

388

  Impairment loss on intangible assets

55,292

72,490

  Expense on increase of provisions

93,448

119,141

  Finance income

(449,117)

(511,068)

  Finance costs

888,521

1,480,007

  Equity in income of equity method accounted investees

(2,483)

(5,412)

  Others

(381)

(89,979)

Changes in:

W

  Trade accounts and notes receivable

24,354

(395,513)

  Other accounts receivable

262,409

(142,775)

  Inventories

203,867

(85,850)

  Other current assets

62,508

(14,479)

  Other non-current assets

(5,093)

2,537

  Trade accounts and notes payable

(2,600,804)

(46,796)

  Other accounts payable

(124,910)

(529,621)

  Accrued expenses

157,252

92,474

  Provisions

(119,049)

(134,684)

  Advances received

11,034

(16,161)

  Proceeds from settlement of derivatives

79,881

35,757

  Other current liabilities

(19,466)

(4,050)

  Defined benefit liabilities (assets), net

(97,767)

(38,018)

  Other non-current liabilities

45,827

5,436

Cash generated from operations

W

3,169,950

3,373,456

 

 

 

100

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

28.
Cash Flow Information, Continued

 

(b) Changes in liabilities arising from financing activities for the years ended December 31, 2025 and 2024 are as follows:

(In millions of won)

 

Non-cash transactions

 

January 1, 2025

Cash flows from financing activities

Gain or loss on foreign currency translation

Interest expense

Others

December 31, 2025

Short-term borrowings

W

969,595

(117,506)

(41,371)

-

-

810,718

Long-term borrowings

12,442,680

(1,134,089)

9,619

11,108

1,008

11,330,326

Bonds

1,137,839

(612,000)

(3,507)

762

-

523,094

Security deposits received

 

160,713

 

(40,500)

 

 -

 

-

 

18,171

 

138,384

Lease liabilities

57,975

(52,902)

(11,326)

-

65,931

59,678

Dividend payable

6,390

(6,390)

 -

-

-

-

Total

W

14,775,192

(1,963,387)

 

(46,585)

 

11,870

 

85,110

 

12,862,200

 

(In millions of won)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-cash transactions

 

 

January 1, 2024

Cash flows from financing activities

Gain or loss on foreign currency translation

Interest expense

Classification

of liabilities

held for sale

 

Others

December 31, 2024

Short-term borrowings

W

1,875,635

(1,065,878)

159,838

-

-

 

-

969,595

Long-term borrowings

13,165,351

(726,352)

1,051,834

4,203

(1,060,592)

 

8,236

12,442,680

Bonds

1,488,143

(370,000)

18,004

1,692

-

 

-

1,137,839

Security deposits received

 

153,370

 

-

 

-

 

-

 

-

 

7,343

 

160,713

Lease liabilities

73,364

(71,008)

16,752

-

(6,772)

 

45,639

57,975

Dividend payable

7,302

(136,519)

268

 -

-

 

135,339

6,390

Total

W

16,763,165

 

(2,369,757)

 

1,246,696

 

5,895

 

(1,067,364)

 

196,557

 

14,775,192

 

101

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

28.
Cash Flow Information, Continued

 

(c) Details of significant non-cash transactions for the years ended December 31, 2025, and 2024 are as follows:

 

(In millions of won)

 

 

2025

 

2024

 Changes in other accounts payable arising from the acquisition of property, plant and equipment

W

(116,302)

 

(630,267)

 Changes in other accounts payable arising from the acquisition of Intangible assets

 

(88,733)

 

(137,918)

 Recognition of right-of-use assets and lease liabilities

W

59,797

 

33,865

 Reclassification of the current portion of borrowings/bonds

 

(3,874,477)

 

(6,559,088)

 Classification of assets held for sale

 

-

 

983,317

 Classification of liabilities held for sale

 

-

 

1,656,841

 

 

(d) For the year ended December 31, 2025, the Group disposed of its subsidiaries, LG Display Guangzhou Co., Ltd. and LG Display (China) Co., Ltd. Details of the disposals are as follows:

 

(In millions of won)

2025

Total consideration from disposal

 

 

 Cash and cash equivalents

W

2,203,806

 Gain or loss on foreign currency translation

 

3,434

Subtotal

W

2,207,240

Carrying amount of disposed assets

 

 

 Cash and cash equivalents

W

1,390,495

 Trade accounts and notes receivable, net

 

1,523,477

 Inventories, net

 

63,516

 Property, plant and equipment

 

606,636

 Others

 

11,525

Subtotal

W

3,595,649

Carrying amount of disposed liabilities

 

 

 Trade accounts and notes payable

W

329,993

 Financial liabilities

 

1,063,548

 Other accounts payables and others

 

102,211

 Others

 

722

Subtotal

W

1,496,474

Non-controlling interests

W

396,554

Reclassification of foreign currency translation differences for foreign operations

 

254,768

Gain on disposal

 

759,387

 

102

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

29.
Related Parties and Others

 

(a) Related parties

 

Details of related parties as of December 31, 2025 are as follows:

 

Classification

 

Description

Associates(*)

 

Paju Electric Glass Co., Ltd. and others

Entity that has significant influence over the Parent Company

 

LG Electronics Inc.

Subsidiaries of the entity that has significant influence over the Parent Company

 

Subsidiaries of LG Electronics Inc.

 

(*) Details of associates are described in Note 8.

 

 

 

 

 

 

103

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

29.
Related Parties and Others, Continued

 

(b) Details of major transactions with related parties for the years ended December 31, 2025 and 2024 are as follows:

 

(In millions of won)

 

2025

 

 

 

 

 

 

Purchase and others

 

 

Sales

and others

 

Dividend income

 

Purchase of raw material and others

 

Others(*)

Associates

 

 

 

 

 

 

 

 

Paju Electric Glass Co., Ltd.

W

-

 

1,664

 

248,746

 

11,413

Material Science Co., Ltd.

 

-

 

-

 

3,198

 

1,923

Entity that has significant influence over the Parent Company

 

 

 

 

 

 

 

 

LG Electronics Inc.

W

292,846

 

-

 

17,911

 

258,458

Subsidiaries of the entity that has significant influence over the Parent Company

 

 

 

 

 

 

 

 

LG Electronics India Pvt. Ltd.

W

32,143

 

-

 

-

 

109

LG Electronics Vietnam Haiphong Co., Ltd.

 

270,949

 

-

 

-

 

1,855

LG Electronics Nanjing New Technology Co., Ltd.

 

187,906

 

-

 

-

 

317

LG Electronics do Brasil Ltda.

 

23,608

 

-

 

-

 

88

LG Innotek Co., Ltd.

 

10,570

 

-

 

26,744

 

79,632

LG Electronics Mlawa Sp. z o.o.

 

1,132,561

 

-

 

-

 

1,031

LG Electronics Reynosa S.A. DE C.V.

 

949,347

 

-

 

-

 

933

LG Electronics Egypt S.A.E

 

12,586

 

-

 

-

 

22

LG Electronics Japan, Inc.

 

-

 

-

 

-

 

6,270

LG Electronics U.S.A., Inc.

 

-

 

-

 

-

 

2,590

P.T. LG Electronics Indonesia

 

477,948

 

-

 

-

 

746

HI-M Solutek Co., Ltd

 

-

 

-

 

-

 

10,417

LG Technology Ventures LLC

 

-

 

-

 

-

 

1,372

Others

 

586

 

-

 

202

 

1,677

Total

W

3,391,050

 

1,664

 

296,801

 

378,853

 

(*) Others include the amount of the acquisition of property, plant, and equipment.

104

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

29.
Related Parties and Others, Continued

 

(In millions of won)

 

2024

 

 

 

 

 

 

Purchase and others

 

 

Sales

and others

 

Dividend income

 

Purchase of raw material and others

 

Others(*1)

Associates

 

 

 

 

 

 

 

 

AVATEC Co., Ltd.(*2)

W

-

 

200

 

52,983

 

2,947

Paju Electric Glass Co., Ltd.

 

-

 

-

 

237,002

 

8,428

WooRee E&L Co., Ltd.(*2)

 

-

 

-

 

5,045

 

32

YAS Co., Ltd.(*2)

 

-

 

-

 

5,266

 

7,578

Material Science Co., Ltd.

 

-

 

-

 

3,579

 

1,512

Entity that has significant influence over the Parent Company

 

 

 

 

 

 

 

 

LG Electronics Inc.

W

349,194

 

-

 

19,959

 

354,362

Subsidiaries of the entity that has significant influence over the Parent Company

 

 

 

 

 

 

 

 

LG Electronics India Pvt. Ltd.

W

52,736

 

-

 

-

 

275

LG Electronics Vietnam Haiphong Co., Ltd.

 

306,727

 

-

 

-

 

5,945

LG Electronics Nanjing New Technology Co., Ltd.

 

379,241

 

-

 

-

 

629

LG Electronics do Brasil Ltda.

 

32,165

 

-

 

-

 

248

LG Innotek Co., Ltd.

 

10,999

 

-

 

18,166

 

72,123

LG Electronics Mlawa Sp. z o.o.

 

977,531

 

-

 

-

 

1,105

LG Electronics Reynosa S.A. DE C.V.

 

973,432

 

-

 

-

 

746

LG Electronics Egypt S.A.E

 

24,454

 

-

 

-

 

32

LG Electronics Japan, Inc.

 

-

 

-

 

-

 

6,250

LG Electronics RUS, LLC

 

-

 

-

 

-

 

4,005

LG Electronics U.S.A., Inc.

 

-

 

-

 

-

 

2,128

P.T. LG Electronics Indonesia

 

482,099

 

-

 

-

 

1,254

HI-M Solutek Co., Ltd

 

-

 

-

 

-

 

9,636

LG Technology Ventures LLC

 

-

 

-

 

-

 

1,319

Others

 

330

 

-

 

462

 

1,579

Total

W

3,588,908

 

200

 

342,462

 

482,133

 

(*1) Others include the amount of the acquisition of property, plant, and equipment.

(*2) For the year ended December 31, 2024, the entity was excluded from related parties due to the loss of significant influence, and the transaction amount represents the amount before its exclusion.

105

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

29.
Related Parties and Others, Continued

 

(c) Details of balances of receivables and payables from transactions with related parties as of December 31, 2025 and 2024 are as follows:

 

(In millions of won)

 

 

 

 

Trade accounts and notes receivable

and others

 

Trade accounts and notes payable

and others

 

 

December 31,

2025

 

December 31,

2024

 

December 31,

2025

 

December 31,

2024

Associates

 

 

 

 

 

 

 

 

Paju Electric Glass Co., Ltd.

W

-

 

-

 

62,277

 

64,140

Material Science Co., Ltd.

 

-

 

-

 

385

 

261

Entity that has significant influence over the Parent Company

 

 

 

 

 

 

 

 

LG Electronics Inc.(*1)

W

95,844

 

179,710

 

88,184

 

1,071,592

Subsidiaries of the entity that has significant influence over the Parent Company

 

 

 

 

 

 

 

 

LG Electronics Vietnam Haiphong Co., Ltd.

W

41,403

 

72,521

 

12

 

921

LG Electronics Nanjing New Technology Co., Ltd.

 

19,036

 

61,922

 

9

 

15

LG Innotek Co., Ltd.(*2)

 

2,102

 

1,803

 

173,625

 

207,258

LG Electronics Mlawa Sp. z o.o.

 

101,105

 

149,789

 

11

 

131

LG Electronics Reynosa S.A. DE C.V.

 

87,555

 

55,500

 

-

 

-

P.T. LG Electronics Indonesia

 

23,766

 

63,719

 

36

 

53

LG Innotek USA, Inc.

 

2,688

 

19

 

-

 

-

Others

 

4,937

 

20,620

 

3,966

 

6,397

Total

W

378,436

 

605,603

 

328,505

 

1,350,768

 

(*1) Trade accounts and notes payable and others for LG Electronics Inc. as of December 31, 2024 includes borrowings of W1,000,000 million(see Note 12.(c)).

(*2) Trade accounts and notes payable and others for LG Innotek Co., Ltd. includes deposits received from lease agreement of W139,500 million as of December 31, 2025 and W180,000 million as of December 31, 2024.

106

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

29.
Related Parties and Others, Continued

 

(d) Details of significant financial transactions with related parties and others for the years ended December 31, 2025 and 2024 are as follows:

 

 

 

2025

(In millions of won)

 

Company Name

 

Repayment of borrowings

Entity that has significant influence over the Parent Company

LG Electronics Inc.

W

1,000,000

 

 

 

 

  2024

(In millions of won)

 

Company Name

 

Capital increase

 

Collection of loans

Associates

WooRee E&L Co., Ltd.(*)

W

-

 

256

Entity that has significant influence over the Parent Company

LG Electronics Inc.

W

436,031

 

-

 

(*) For the year ended December 31, 2024, the entity was excluded from related parties due to the loss of significant influence, and the transaction amount represents the amount before its exclusion.

 

 

 

107

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

29.
Related Parties and Others, Continued

 

(e) Large Enterprise Group Transactions

 

According to the 'Related Party Disclosures' under the Korean IFRS 1024, although not included in the scope of related parties, the major transaction details with the Large Enterprise Group subsidiaries and their affiliates, as well as the amounts of receivables and payables for the years ended December 31, 2025 and 2024 and as of December 31, 2025 and 2024, in accordance with the Monopoly Regulation and Fair Trade Act, are as follows:

 

(In millions of won)

 

 

For the year ended December 31, 2025

 

December 31, 2025

 

 

Sales

and others

 

Purchase

and others

 

Trade accounts and notes receivable

and others

 

Trade accounts and notes payable

and others

LG Uplus Corp.

W

-

 

2,357

 

-

 

163

LG Chem Ltd. and its subsidiaries

 

322

 

340,980

 

59

 

55,879

D&O Corp. and its subsidiaries

 

260

 

16,241

 

-

 

4,996

LG Corp.(*)

 

-

 

59,538

 

6,911

 

12

LG Management Development Institute

 

-

 

45,016

 

3

 

386

LG CNS Co., Ltd. and its subsidiaries

 

166

 

277,335

 

4

 

107,292

LG Household & Health Care Ltd. and its subsidiaries

 

-

 

72

 

-

 

-

HSAD Inc. and its subsidiaries

 

-

 

1,087

 

-

 

127

Robostar Co., Ltd.

 

-

 

320

 

-

 

59

Total

W

748

 

742,946

 

6,977

 

168,914

 

(*) According to the lease agreement signed with LG Corp., the recognized lease liabilities as of December 31, 2025 are W4,607 million, and the lease liabilities are not included in the amount of 'Trade accounts and notes payable and others' above. The amount of lease repayment for the year ended December 31, 2025 is W6,906 million.

 

 

 

108

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

29.
Related Parties and Others, Continued

 

(In millions of won)

 

 

For the year ended December 31, 2024

 

December 31, 2024

 

 

Sales

and others

 

Purchase

and others

 

Trade accounts and notes receivable

and others

 

Trade accounts and notes payable and others

LG Uplus Corp.

W

105,300

 

2,765

 

-

 

164

LG Chem Ltd. and its subsidiaries

 

500

 

567,215

 

188

 

239,895

D&O Corp. and its subsidiaries(*1)

 

270

 

72,093

 

-

 

86,714

LG Corp.(*2)

 

-

 

63,471

 

7,551

 

10,731

LG Management Development Institute

 

-

 

30,565

 

3

 

340

LG CNS Co., Ltd. and its subsidiaries

 

184

 

249,674

 

-

 

78,229

LG Household & Health Care Ltd. and its subsidiaries

 

-

 

96

 

-

 

-

HSAD Inc. and its subsidiaries

 

-

 

5,439

 

-

 

542

Robostar Co., Ltd.

 

-

 

2,821

 

-

 

2,398

Total

W

106,254

 

994,139

 

7,742

 

419,013

 

(*1) Among the D&O Corp. and its subsidiaries, S&I Corporation Co., Ltd. and Xi C&A Co., Ltd. were excluded from the large corporate group as of March 19, 2024.

(*2) According to the lease agreement with LG Corp., there were no lease liabilities outstanding as of December 31, 2024. The amount of lease repayment for the year ended December 31, 2024 is W9,681 million.

 

 

 

109

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

29.
Related Parties and Others, Continued

 

(f) Key management personnel compensation

 

Details of compensation costs of key management for the years ended December 31, 2025 and 2024 are as follows:

 

(In millions of won)

 

 

 

 

 

 

2025

 

2024

Short-term benefits

W

2,446

 

2,397

Post-employment benefit

 

586

 

604

Total

W

3,032

 

3,001

 

Key management refers to the registered directors who have significant control and responsibilities over the Parent Company’s operations and business.

 

(g) At the end of the reporting period, the Group did not set an allowance for doubtful accounts on the balance of receivables for related parties.

 

110

LG DISPLAY CO., LTD. AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

 

 

30.
Subsequent Event

 

The management of the Group decided to transfer the Auto Display LCD module business of LG Display Nanjing Co., Ltd. in order to enhance its business structure and strengthen its profitability, and entered into a business transfer agreement on February 9, 2026.

 

111

img179339159_0.jpg

Independent Auditor’s Report on Internal Control over Financial Reporting

for Consolidation Purposes

(English Translation of a Report Originally Issued in Korean)

 

To the Board of Directors and Shareholders of

LG Display Co., Ltd.

 

Opinion on Internal Control over Financial Reporting for Consolidation Purposes

 

We have audited Internal Control over Financial Reporting of LG Display Co., Ltd. and its subsidiaries (collectively referred to as the "Group") for consolidation purposes as at December 31, 2025, based on Conceptual Framework for Designing and Operating Internal Control over Financial Reporting.

 

In our opinion, the Group maintained, in all material respects, effective internal control over financial reporting for consolidation purposes as at December 31, 2025, based on Conceptual Framework for Designing and Operating Internal Control over Financial Reporting.

 

We also have audited, in accordance with Korean Standards on Auditing, the consolidated financial statements of the Group, which comprise the consolidated statement of financial position as at December 31, 2025, and the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flow for the year then ended, and notes to the consolidated financial statements including material accounting policy information, and our report dated February 27, 2026, expressed an unqualified opinion.

 

Basis for Opinion on Internal Control over Financial Reporting for Consolidation Purposes

 

We conducted our audit in accordance with Korean Standards on Auditing. Our responsibilities under these standards are further described in the Auditor’s Responsibilities for the Audit of Internal Control over Financial Reporting for consolidation purposes section of our report. We are independent of the Group in accordance with the ethical requirements of the Republic of Korea that are relevant to our audit of internal control over financial reporting for consolidation purposes and we have fulfilled our other ethical responsibilities in accordance with the ethical requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

 

Responsibilities of Management and Those Charged with Governance for Internal Control over Financial Reporting for Consolidation Purposes

 

Management is responsible for designing, implementing and maintaining effective internal control over financial reporting for consolidation purposes, and for its assessment about the effectiveness ofinternal control over financial reporting for consolidation purposes, included in the accompanying Management’s Report on the Effectiveness of Internal Control over Financial Reporting for Consolidation Purposes.

 

Those charged with governance have the responsibilities for overseeing internal control over financial reporting for consolidation purposes.

 

Auditor’s Responsibilities for the Audit of Internal Control over Financial Reporting for Consolidation Purposes

 

Our responsibility is to express an opinion on internal control over financial reporting for consolidation purposes of the Group based on our audit. We conducted the audit in accordance with Korean Standards on Auditing. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting for consolidation purposes was maintained in all material respects.

 

An audit of internal control over financial reporting for consolidation purposes involves performing procedures to obtain audit evidence about whether a material weakness exists. The procedures selected depend on the auditor’s judgment, including the assessment of the risks that a material weakness exists. An audit includes obtaining an understanding of internal control over financial reporting for consolidation purposes and testing and evaluating the design and operating effectiveness of internal control over financial reporting for consolidation purposes based on the assessed risk.

 

img179339159_1.jpg

 


Definition and Inherent Limitations of Internal Control over Financial Reporting for Consolidation Purposes

 

The Group’s internal control over financial reporting for consolidation purposes is a process effected by those charged with governance, management, and other personnel, designed to provide reasonable assurance regarding the preparation of reliable consolidated financial statements in accordance with International Financial Reporting Standards as adopted by the Republic of Korea. The Group’s internal control over financial reporting for consolidation purposes includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Group; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with International Financial Reporting Standards as adopted by the Republic of Korea, and that receipts and expenditures of the Group are being made only in accordance with authorizations of management and directors of the Group; and (3) provide reasonable assurance regarding prevention, or timely detection and correction of unauthorized acquisition, use, or disposition of the Group’s assets that could have a material effect on the consolidated financial statements.

Because of its inherent limitations, internal control over financial reporting for consolidation purposes may not prevent, or detect and correct, misstatements. Also, projections of any assessment of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The engagement partner on the audit resulting in this independent auditor’s report is Sang-Woo Nam, Certified Public Accountant.

 

 

 

 

 

 

 

Seoul, Korea

February 27, 2026

 

This report is effective as atFebruary 27, 2026, the audit report date. Certain subsequent events or circumstances, which may occur between the audit report date and the time of reading this report, could have a material impact on the Group’s internal control over financial reporting for consolidation purposes thereto. Accordingly, the readers of the audit report should understand that there is a possibility that the above audit report may have to be revised to reflect the impact of such subsequent events or circumstances, if any.

 

113

 

Management’s Report on the Effectiveness of

Internal Control over Financial Reporting for Consolidation Purposes

(English Translation of a Report Originally Issued in Korean)

To the Shareholders, Board of Directors and Audit Committee of LG Display Co., Ltd.

We, as the Chief Executive Officer (CEO) and the Internal Control over Financial Reporting Officer of LG Display Co., Ltd. and its subsidiaries (“the Group”), assessed the effectiveness of the design and operation of the Group’s Internal Control over Financial Reporting for consolidation purposes for the year ended December 31, 2025.

The Group’s management, including ourselves, is responsible for designing and operating internal control over financial reporting for consolidation purposes.

We assessed the design and operating effectiveness of internal control over financial reporting for consolidation purposes in the prevention and detection of an error or fraud which may cause material misstatements in the preparation and disclosure of reliable consolidated financial statements.

We designed and operated internal control over financial reporting for consolidation purposes in accordance with Conceptual Framework for Designing and Operating Internal Control over Financial Reporting established by the Operating Committee of Internal Control over Financial Reporting in Korea. And, we conducted an evaluation of internal control over financial reporting for consolidation purposes based on Detailed Enforcement Rules of the Regulation on External Audit and Accounting, etc. Table 6 Internal Control over Financial Reporting Evaluation and Reporting Standards.

Based on the assessment results, we believe that the Group’s internal control over financial reporting for consolidation purposes, as at December 31, 2025, is designed and operated effectively, in all material respects, in accordance with Conceptual Framework for Designing and Operating Internal Control over Financial Reporting.

We certify that this report does not contain any untrue statement of a fact, or omit to state a fact necessary to be presented herein. We also certify that this report does not contain or present any statements which cause material misunderstandings, and we have reviewed and verified this report with sufficient due care.

<Attachment>

Internal control activities performed by the Group to address risks to embezzlement and other financial fraud

January 27, 2026

Cheoldong Jeong,

Chief Executive Officer

Sunghyun Kim,

Internal Control over Financial Reporting Officer

 

 

114

 

<Attachment>

Internal control activities performed by the Group to address risks to embezzlement and other financial fraud

 

Category

 

Control Activities Performed by the Group

 

Target Company

 

Design and Operation Assessment Results

Entity
Level Control

 

<Operation of anti-fraud system>
The management periodically notifies all executives and employees of the importance of ethical management related to the Code of Ethics and the Code of Conduct, and operates an anonymous reporting channel for violations of the Code of Ethics and internal accounting control regulations.

 

LG Display Co., Ltd., LG Display High-Tech (China) Co., Ltd. and 14 others

 

As a result of the test performed,
No material weakness found
(Internal Control & Consolidation Accounting Team, '25.June, '25.September, '25.December)

<Periodic monitoring of Segregation of Duty Status>
Internal Control & Consolidation Accounting Team defines incompatible tasks, and periodically monitors and reports on the adequacy of segregation of duty and access rights.

 

LG Display Co., Ltd., LG Display High-Tech (China) Co., Ltd. and 14 others

 

As a result of the test performed,
No material weakness found
(Internal Control & Consolidation Accounting Team, '25.June, '25.September, '25.December)

Control of Treasury

 

<Account Registration Management>
The cash management Team Leader reviews and approves the adequacy of account registration.

 

LG Display Co., Ltd., LG Display High-Tech (China) Co., Ltd. and 14 others

 

As a result of the test performed,
No material weakness found
(Internal Control & Consolidation Accounting Team, '25.June, '25.September, '25.December)

 

 

Control of Treasury

 

<Seal, OTP management>
Physical access to seals and OTPs is restricted except for the person in charge of the supervising department, and when using a seal, it can be stamped after confirming the purpose of use and approval details of the requesting department.

 

LG Display Co., Ltd., LG Display High-Tech (China) Co., Ltd. and 14 others

 

As a result of the test performed,
No material weakness found
(Internal Control & Consolidation Accounting Team, '25.June, '25.September, '25.December)

<Segregation of Duty related to payment>
Register Preliminary Payment, Electronic Payment, Internal Account Transfer, Foreign Exchange Transaction, etc., are separate from those in charge of the creator and the approver.

 

LG Display Co., Ltd., LG Display High-Tech (China) Co., Ltd. and 14 others

 

As a result of the test performed,
No material weakness found
(Internal Control & Consolidation Accounting Team, '25.June, '25.September, '25.December)

<Daily Account Balance Reconciliation>
The person in charge performs the reconciliation of the bank balance for each daily account and takes necessary action in case of any discrepancies.

 

LG Display Co., Ltd., LG Display High-Tech (China) Co., Ltd. and 14 others

 

As a result of the test performed,
No material weakness found
(Internal Control & Consolidation Accounting Team, '25.June, '25.September, '25.December)

<Restriction on the use of corporate credit cards>
Corporate cards are managed according to standards such as usage limits for each position, and the system is set up to prohibit the expense processing and approval for improper use.

 

LG Display Co., Ltd., LG Display High-Tech (China) Co., Ltd. and 13 others

 

As a result of the test performed,
No material weakness found
(Internal Control & Consolidation Accounting Team, '25.June, '25.September, '25.December)

 

 

Other Process Level Control

 

<Supplier Account Registration Management>
The discretionary authority of the department such as in charge of purchasing, etc., reviews and approves whether the evaluation details of the company for the new supplier meet the standards, and the cash management team leader checks the original documents required for the registration of the company and approves the account registration.

 

LG Display Co., Ltd., LG Display High-Tech (China) Co., Ltd. and 5 others

 

As a result of the test performed,
No material weakness found
(Internal Control & Consolidation Accounting Team, '25.June, '25.September, '25.December)

<Sales Confirmation>
At the end of each month, the person in charge of the sales department agrees/confirms the monthly sales amount with each customer, including the sales price and quantity by model, and reports it to the leader.

 

LG Display Co., Ltd., LG Display High-Tech (China) Co., Ltd. and 11 others

 

As a result of the test performed,
No material weakness found
(Internal Control & Consolidation Accounting Team, '25.June, '25.September, '25.December)

<Report on Inventory Physical Inspection Results>
The discretionary authority of the supervising department reviews and approves the results of the regular physical inspection of inventory assets.

 

LG Display Co., Ltd., LG Display High-Tech (China) Co., Ltd. and 13 others

 

As a result of the test performed,
No material weakness found
(Internal Control & Consolidation Accounting Team, '25.June, '25.September, '25.December)

 

 

 

 

 

 

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

LG Display Co., Ltd.

(Registrant)

Date: February 27, 2026 By: /s/ Kyu Dong Kim

(Signature)

Name: Kyu Dong Kim

Title: Vice President / Finance & Risk Management Division