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 March 2022

LG Display Co., Ltd.

(Translation of Registrant’s name into English)

LG Twin Towers, 128 Yeoui-dearo, Youngdungpo-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  ☒             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  ☒

Submission of Audit Report

1. Name of external auditor: Samjong Accounting Corporation (KPMG)

2. Date of receiving external audit report: March 8, 2022

3. Auditor’s opinion    

	FY 2021		FY 2020
Audit Report on Consolidated Financial Statements		Unqualified		Unqualified

4. Financial Highlights of Consolidated Financial Statements

(KRW)
Items	FY 2021			FY 2020
Total Assets		38,154,514,943,430			35,066,011,768,716
Total Liabilities		23,392,013,818,123			22,334,584,392,324
Total Shareholders’ Equity		14,762,501,125,307			12,731,427,376,392
Capital Stock		1,789,078,500,000			1,789,078,500,000
Revenues		29,878,043,071,138			24,261,560,615,395
Operating Income		2,230,608,127,616			-36,464,277,472
Ordinary Income		1,718,884,560,453			-602,445,527,492
Net Income		1,333,544,156,243			-76,146,607,911
Total Shareholders’ Equity / Capital Stock		825	%		712	%

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Consolidated Financial Statements

For the Years Ended December 31, 2021 and 2020

(With Independent Auditors’ Report Thereon)

Contents

	Page
Independent Auditors’ Report		1
Consolidated Statements of Financial Position		5
Consolidated Statements of Comprehensive Income		6
Consolidated Statements of Changes in Equity		7
Consolidated Statements of Cash Flows		8
Notes to the Consolidated Financial Statements		10

Independent Auditors’ Report

Based on a report originally issued in Korean

To the Shareholders and Board of Directors

LG Display Co., Ltd.:

Opinion

We have audited the accompanying consolidated financial statements of LG Display Co., Ltd. and its subsidiaries (the “Group”), which comprise the consolidated statements of financial position of the Group as of December 31, 2021 and 2020, the related consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements comprising significant accounting policies and other explanatory information.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2021 and 2020, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with Korean International Financial Reporting Standards (“K-IFRS”).

Basis for Opinion

We conducted our audits in accordance with Korean Standards on Auditing. Our responsibilities under those standards are further described in the Auditors’ 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 that are relevant to our audit of the consolidated financial statements in the Republic of Korea, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter

Without qualifying our opinion, we draw attention to Note 3 to the consolidated financial statements. The Group early adopted the amendments to K-IFRS No. 1016, Property, Plant and Equipment: Proceeds before Intended Use, and restated comparative statement of financial position as of December 31, 2020, and the statements of comprehensive income, changes in equity and cash flows for the year then ended.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements as of and for the year ended December 31, 2021. These matters were 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 these matters.

(i) Impairment test for Display Cash Generating Unit (CGU)

As discussed in Notes 3(k) and 10 to the consolidated financial statements, goodwill of W48,339 million is allocated to the Group’s Display CGU. The Group’s non-financial assets as of December 31, 2021 amount to W22,203,344 million, and a large portion of which are related to the Display CGU. The recoverable amount used by the Group in impairment test of the Display CGU is value in use based on discounted cash flow model. As a result of impairment test for Display CGU, the Group concluded that recoverable amount exceeds the carrying amount.

We identified impairment test for Display CGU as a key audit matter. Revenue and operating expenditures for the forecast period and discount rate used to estimate value in use for impairment test of Display CGU involve significant judgement and minor changes would have a significant effect on the results of the Group’s impairment test of Display CGU.

1

The primary procedures we performed to address the impairment test for Display CGU include followings:

• We tested certain internal controls over the Group’s non-financial assets impairment test process, including controls related to development of the revenue and operating expenditures forecasts and discount rate assumptions for Display CGU.

• We compared the Group’s historical revenue and operating expenditures forecasts to actual results to assess the Group’s ability to accurately forecast.

• We evaluated the revenue and operating expenditures forecasts used to determine the value in use by comparison with the financial budgets approved by the board of directors.

• We performed sensitivity analysis over the discount rate assumptions to assess their impact on the Group’s impairment test.

• We involved our valuation professionals with specialized skills and knowledge who assisted us in the following:

• testing discount rate by comparing them against independently developed rates using publicly available market data for comparable entities; and

• testing revenue and operating expenditures forecasts by comparing them against analyst reports and industry reports.

(ii) Assessment of recognition of deferred tax assets

As discussed in Note 24 to the consolidated financial statements, the deferred tax assets arise primarily due to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as, unused tax losses and tax credit carryforwards. The assessment of the recognition of these deferred tax assets is dependent on the generation of future taxable income of the Group. As of December 31, 2021, the Group had W2,307,692 million of deferred tax assets in the consolidated statement of financial position and W182,617 million of unrecognized tax credit carryforwards as of December 31, 2021, primarily related to LG Display Co., Ltd.

We identified the assessment of the recognition of the deferred tax assets as a key audit matter because it involves high degree of subjective management judgment in estimating future taxable profits over the periods in which the above mentioned differences become deductible and within the periods before the unused tax losses and tax credit forwards expire and the feasibility of planned tax strategies. The subjectivity is primarily driven by the Group’s assumptions in revenue, operating expenditures and subsidiaries’ dividend distribution, which are used to estimate the forecasted taxable income in the future.

The primary procedures we performed to address the assessment of recognition of deferred tax assets include followings:

• We tested certain internal controls relating to the Group’s deferred tax assets recognition process, including controls related to the development of assumptions in determining the future taxable income and subsidiaries’ dividend distribution for each year.

• We analyzed the Group’s estimates of taxable income, including analyzing the Group’s forecasted revenue and operating expense by comparing them with the financial budgets approved by the board of directors and historical performance.

• We compared the forecasts of taxable income and timing of utilization of tax losses and tax credit carryforwards in prior years to actual results to assess the Group’s ability to accurately forecast.

• We also evaluated the Group’s assessment on the history of realizing deferred tax assets in connection with the unused tax losses carryforwards and collecting declared subsidiaries’ dividends in connection with the development of assumptions in determining subsidiaries’ dividend distribution.

• We involved tax professionals with specialized skills and knowledge who assisted in assessing the feasibility of planned tax strategies when recognizing deferred tax assets.

Other matter

The procedures and practices utilized in the Republic of Korea to audit such consolidated financial statements may differ from those generally accepted and applied in other countries.

2

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

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with K-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 these 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, or has no realistic alternative but to do so.

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

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether theses consolidated financial statements as a whole are free from material misstatements, whether due to fraud or error, and to issue an auditors’ 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 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, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.

• 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, then we are required to draw attention in our auditors’ 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 auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.

• 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.

3

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and 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 auditors’ 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 auditors’ report is Sang Hyun Han.

KPMG Samjong Accounting Corp.

Seoul, Korea

March 8, 2022

This report is effective as of March 8, 2022, 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 the above audit report has not been updated to reflect the impact of such subsequent events or circumstances, if any.

4

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Financial Position

As of December 31, 2021 and 2020

(In millions of won)	Note	December 31, 2021		December 31, 2020
Assets
Cash and cash equivalents	4, 26	W	3,541,597		4,218,099
Deposits in banks	4, 26		743,305		78,652
Trade accounts and notes receivable, net	5, 14, 26, 29		4,574,789		3,517,512
Other accounts receivable, net	5, 26		121,899		144,480
Other current financial assets	6, 26, 27		68,203		52,403
Inventories	7		3,350,375		2,170,656
Prepaid income taxes	24		58,536		114,202
Other current assets	5		728,363		803,466
Total current assets			13,187,067		11,099,470
Deposits in banks	4, 26		11		11
Investments in equity accounted investees	8		126,719		114,551
Other non-current accounts receivable, net	5, 26		2,376		—
Other non-current financial assets	6, 26, 27		156,211		68,231
Property, plant and equipment, net	9, 17, 27		20,558,446		20,139,703
Intangible assets, net	10, 17		1,644,898		1,020,088
Deferred tax assets	24		2,307,692		2,275,514
Defined benefits assets, net	12		68,276		224,997
Other non-current assets			102,819		123,447
Total non-current assets			24,967,448		23,966,542
Total assets		W	38,154,515		35,066,012
Liabilities
Trade accounts and notes payable	26, 29	W	4,814,055		3,779,290
Current financial liabilities	11, 26, 27		4,069,712		3,195,024
Other accounts payable	26		3,401,346		2,781,941
Accrued expenses			1,218,456		651,880
Income tax payable			179,335		25,004
Provisions	13		173,431		197,468
Advances received			67,046		333,821
Other current liabilities			71,436		42,520
Total current liabilities			13,994,817		11,006,948
Non-current financial liabilities	11, 26, 27		8,702,745		11,124,846
Non-current provisions	13		92,942		89,633
Defined benefit liabilities, net	12		1,589		1,498
Deferred tax liabilities	24		6,636		9,530
Other non-current liabilities	26		593,285		102,129
Total non-current liabilities			9,397,197		11,327,636
Total liabilities			23,392,014		22,334,584
Equity
Share capital	15		1,789,079		1,789,079
Share premium	15		2,251,113		2,251,113
Retained earnings	15		8,541,521		7,518,786
Reserves	15		537,142		(163,446	)
Total equity attributable to owners of the Controlling Company			13,118,855		11,395,532
Non-controlling interests			1,643,646		1,335,896
Total equity			14,762,501		12,731,428
Total liabilities and equity		W	38,154,515		35,066,012

See accompanying notes to the consolidated financial statements.

5

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2021 and 2020

(In millions of won, except earnings per share)	Note	2021			2020
Revenue	16, 17, 29	W	29,878,043			24,261,561
Cost of sales	7, 18, 29		(24,572,939	)		(21,626,339	)
Gross profit			5,305,104			2,635,222
Selling expenses	18, 19		(933,043	)		(817,611	)
Administrative expenses	18, 19		(919,409	)		(755,340	)
Research and development expenses	18		(1,222,044	)		(1,098,736	)
Operating profit (loss)			2,230,608			(36,465	)
Finance income	22		425,835			438,786
Finance costs	22		(916,614	)		(802,678	)
Other non-operating income	21		1,252,135			1,784,646
Other non-operating expenses	18, 21		(1,280,859	)		(1,999,280	)
Equity in income of equity accounted investees, net	8		7,780			12,545
Profit (loss) before income tax			1,718,885			(602,446	)
Income tax expense (benefit)	23		385,341			(526,299	)
Profit (loss) for the year			1,333,544			(76,147	)
Other comprehensive income (loss)
Items that will never be reclassified to profit or loss
Remeasurements of net defined benefit liabilities	12, 23		(163,363	)		110,404
Other comprehensive income (loss) from associates	8		(84	)		39
			(163,447	)		110,443
Items that are or may be reclassified to profit or loss
Foreign currency translation differences for foreign operations	23		869,789			48,181
Loss on valuation of derivative	15, 23		(9,227	)		—
Other comprehensive income (loss) from associates	8, 23		4,497			(210	)
			865,059			47,971
Other comprehensive income for the year, net of income tax			701,612			158,414
Total comprehensive income for the year		W	2,035,156			82,267
Profit (loss) attributable to:
Owners of the Controlling Company			1,186,182			(94,853	)
Non-controlling interests			147,362			18,706
Profit (loss) for the year		W	1,333,544			(76,147	)
Total comprehensive income attributable to:
Owners of the Controlling Company			1,723,323			54,219
Non-controlling interests			311,833			28,048
Total comprehensive income for the year		W	2,035,156			82,267
Earnings (loss) per share (in won)
Basic earning (loss) per share	25	W	3,315			(265	)
Diluted earning (loss) per share	25	W	3,130			(265	)

See accompanying notes to the consolidated financial statements.

6

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the years ended December 31, 2021 and 2020

	Attributable to owners of the Controlling Company
	Share		Share		Retained									Non-controlling			Total
(In millions of won)	capital		premium		earnings			Reserves			Sub-total			interests			equity
Balances at January 1, 2020	W	1,789,079		2,251,113		7,503,312			(203,021	)		11,340,483			1,147,798			12,488,281
Total comprehensive income (loss) for the year
Profit (loss) for the year		—		—		(94,853	)		—			(94,853	)		18,706			(76,147	)
Other comprehensive income (loss)
Remeasurements of net defined benefit liabilities, net of tax		—		—		110,404			—			110,404			—			110,404
Foreign currency translation differences		—		—		—			38,839			38,839			9,342			48,181
Other comprehensive income (loss) from associates		—		—		39			(210	)		(171	)		—			(171	)
Total other comprehensive income		—		—		110,443			38,629			149,072			9,342			158,414
Total comprehensive income for the year	W	—		—		15,590			38,629			54,219			28,048			82,267
Transaction with owners, recognized directly in equity
Subsidiaries’ dividends distributed to non-controlling interests		—		—		—			—			—			(12,086	)		(12,086	)
Capital contribution from non-controlling interests		—		—		(116	)		946			830			172,136			172,966
Balances at December 31, 2020	W	1,789,079		2,251,113		7,518,786			(163,446	)		11,395,532			1,335,896			12,731,428
Balances at January 1, 2021	W	1,789,079		2,251,113		7,518,786			(163,446	)		11,395,532			1,335,896			12,731,428
Total comprehensive income (loss) for the year
Profit for the year		—		—		1,186,182			—			1,186,182			147,362			1,333,544
Other comprehensive income (loss)
Remeasurements of net defined benefit liabilities, net of tax		—		—		(163,363	)		—			(163,363	)		—			(163,363	)
Foreign currency translation differences		—		—		—			705,318			705,318			164,471			869,789
Other comprehensive income (loss) from associates		—		—		(84	)		4,497			4,413			—			4,413
Loss on valuation of derivative		—		—		—			(9,227	)		(9,227	)		—			(9,227	)
Total other comprehensive income (loss)		—		—		(163,447	)		700,588			537,141			164,471			701,612
Total comprehensive income for the year	W	—		—		1,022,735			700,588			1,723,323			311,833			2,035,156
Transaction with owners, recognized directly in equity
Subsidiaries’ dividends distributed to non-controlling interests		—		—		—			—			—			(4,083	)		(4,083	)
Balances at December 31, 2021	W	1,789,079		2,251,113		8,541,521			537,142			13,118,855			1,643,646			14,762,501

See accompanying notes to the consolidated financial statements.

7

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the years ended December 31, 2021 and 2020

(In millions of won)	Note		2021			2020
Cash flows from operating activities:
Profit (loss) for the year			W	1,333,544			(76,147	)
Adjustments for:
Income tax expense (benefit)		23		385,341			(526,299	)
Depreciation and amortization		9, 10, 18		4,500,701			4,134,027
Gain on foreign currency translation				(74,125	)		(296,870	)
Loss on foreign currency translation				193,095			217,287
Expenses related to defined benefit plans		12, 20		144,241			160,669
Gain on disposal of property, plant and equipment				(19,367	)		(37,835	)
Loss on disposal of property, plant and equipment				64,350			60,294
Impairment loss on property, plant and equipment				19,085			38,494
Reversal of impairment loss on property, plant and equipment				(1,121	)		—
Gain on disposal of intangible assets				(196	)		(111	)
Loss on disposal of intangible assets				—			368
Impairment loss on intangible assets				29,488			79,593
Reversal of impairment loss on intangible assets				(1,152	)		(1,110	)
Expense on increase of provisions				216,873			308,334
Finance income				(352,423	)		(331,723	)
Finance costs				832,596			612,164
Equity in income of equity method accounted investees, net		8		(7,780	)		(12,545	)
Loss on liquidation of investments in subsidiaries				—			72,654
Other income				—			(11,485	)
Other expenses				15,538			—
				5,945,144			4,465,906
Changes in:
Trade accounts and notes receivable				(964,130	)		(935,888	)
Other accounts receivable				20,395			63,192
Inventories				(1,123,239	)		(128,495	)
Lease receivables				4,765			6,428
Other current assets				107,679			175,486
Other non-current assets				(58,821	)		(58,641	)
Trade accounts and notes payable				1,037,950			1,387,084
Other accounts payable				72,640			(1,152,786	)
Accrued expenses				580,404			(9,704	)
Provisions				(237,601	)		(277,876	)
Advances received				(268,074	)		(408,900	)
Other current liabilities				9,100			(40,200	)
Defined benefit liabilities, net				(208,199	)		(109,801	)
Other non-current liabilities				11,144			12,973
				(1,015,987	)		(1,477,128	)
Cash generated from operating activities				6,262,701			2,912,631
Income taxes paid				(118,305	)		(156,997	)
Interests received				79,188			75,424
Interests paid				(470,138	)		(552,274	)
Net cash provided by operating activities			W	5,753,446			2,278,784

See accompanying notes to the consolidated financial statements.

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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Cash Flows, Continued

For the years ended December 31, 2021 and 2020

(In millions of won)	Note		2021			2020
Cash flows from investing activities:
Dividends received			W	4,068			8,239
Increase in deposits in banks				(694,313	)		(78,452	)
Proceeds from withdrawal of deposits in banks				77,152			78,557
Acquisition of financial assets at fair value through profit or loss				(34,418	)		(3,227	)
Proceeds from disposal of financial assets at fair value through profit or loss				5,226			99
Proceeds from disposal of financial assets at fair value through other comprehensive income				24			6
Proceeds from disposal of investments in equity accounted investees				4,363			2,400
Acquisition of property, plant and equipment				(3,141,430	)		(2,595,381	)
Proceeds from disposal of property, plant and equipment				65,711			446,193
Acquisition of intangible assets				(635,805	)		(353,313	)
Proceeds from disposal of intangible assets				2,946			16,996
Government grants received				85,983			118,341
Receipt from settlement of derivatives				8,344			24,468
Proceeds from collection of short-term loans				14,533			13,720
Increase in long-term loans				(26,473	)		—
Increase in deposits				(7,145	)		(2,084	)
Decrease in deposits				8,154			1,286
Proceeds from disposal of other assets				—			11,000
Net cash used in investing activities				(4,263,080	)		(2,311,152	)
Cash flows from financing activities:		28
Proceeds from short-term borrowings				2,573,757			2,238,806
Repayments of short-term borrowings				(2,425,117	)		(2,506,420	)
Proceeds from issuance of bonds				498,027			49,949
Proceeds from long-term borrowings				1,298,346			2,329,013
Repayments of current portion of long-term borrowings and bonds				(4,344,208	)		(1,278,199	)
Repayment of lease liabilities				(66,941	)		(62,200	)
Capital contribution from non-controlling interests				—			172,966
Subsidiaries’ dividends distributed to non-controlling interests				—			(12,086	)
Net cash provided by (used in) financing activities				(2,466,136	)		931,829
Net increase (decrease) in cash and cash equivalents				(975,770	)		899,461
Cash and cah equivalents at January 1				4,218,099			3,336,003
Effect of exchange rate fluctuations on cash held				299,268			(17,365	)
Cash and cash equivalents at December 31			W	3,541,597			4,218,099

See accompanying notes to the consolidated financial statements.

9

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

1. Reporting Entity

(a) Description of the Controlling Company

LG Display Co., Ltd. (the “Controlling Company”) was incorporated in February 1985 and the Controlling Company is a public corporation listed in the Korea Exchange since 2004. The main business of the Controlling Company and its subsidiaries (the “Group”) is to manufacture and sell displays and its related products. As of December 31, 2021, the Group is operating 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 Controlling Company is domiciled in the Republic of Korea with its address at 128 Yeouidae-ro, Yeongdeungpo-gu, Seoul, the Republic of Korea. As of December 31, 2021, LG Electronics Inc., a major shareholder of the Controlling Company, owns 37.9% (135,625,000 shares) of the Controlling Company’s common stock.

The Controlling Company’s common stock is listed on the Korea Exchange under the identifying code 034220. As of December 31, 2021, there are 357,815,700 shares of common stock outstanding. The Controlling Company’s common stock is also listed on the New York Stock Exchange in the form of American Depository Shares (“ADSs”) under the symbol “LPL”. One ADS represents one-half of one share of common stock. As of December 31, 2021, there are 15,910,934 ADSs outstanding.

10

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

1. Reporting Entity, Continued

(b) Consolidated Subsidiaries as of December 31, 2021

(In millions)
Subsidiaries	Location	Percentage of ownership			Fiscal year end		Date of incorporation	Business	Capital stocks
LG Display America, Inc.	San Jose, U.S.A.		100	%		December 31	September 24, 1999	Sell display products		USD 411
LG Display Germany GmbH	Eschborn, Germany		100	%		December 31	October 15, 1999	Sell display products		EUR 1
LG Display Japan Co., Ltd.	Tokyo, Japan		100	%		December 31	October 12, 1999	Sell display products		JPY 95
LG Display Taiwan Co., Ltd.	Taipei, Taiwan		100	%		December 31	April 12, 1999	Sell display products		NTD 116
LG Display Nanjing Co., Ltd.	Nanjing, China		100	%		December 31	July 15, 2002	Manufacture display products		CNY 3,020
LG Display Shanghai Co., Ltd.	Shanghai, China		100	%		December 31	January 16, 2003	Sell display products		CNY 4
LG Display Guangzhou Co., Ltd.	Guangzhou, China		100	%		December 31	June 30, 2006	Manufacture display products		CNY 1,655
LG Display Shenzhen Co., Ltd.	Shenzhen, China		100	%		December 31	July 27, 2007	Sell display products		CNY 4
LG Display Singapore Pte. Ltd.	Singapore		100	%		December 31	November 4, 2008	Sell display products		USD 1
L&T Display Technology (Fujian) Limited	Fujian, China		51	%		December 31	December 7, 2009	Manufacture and sell LCD module and LCD monitor sets		CNY 116
LG Display Yantai Co., Ltd.	Yantai, China		100	%		December 31	March 17, 2010	Manufacture display products		CNY 1,008
Nanumnuri Co., Ltd.	Gumi, South Korea		100	%		December 31	March 21, 2012	Provide janitorial services		KRW 800
LG Display (China) Co., Ltd.	Guangzhou, China		70	%		December 31	December 10, 2012	Manufacture and sell display products		CNY 8,232
Unified Innovative Technology, LLC	Wilmington, U.S.A.		100	%		December 31	March 12, 2014	Manage intellectual property		USD 9
LG Display Guangzhou Trading Co., Ltd.	Guangzhou, China		100	%		December 31	April 28, 2015	Sell display products		CNY 1
Global OLED Technology, LLC	Sterling, U.S.A.		100	%		December 31	December 18, 2009	Manage OLED intellectual property		USD 138
LG Display Vietnam Haiphong Co., Ltd.	Haiphong, Vietnam		100	%		December 31	May 5, 2016	Manufacture display products		USD 600
Suzhou Lehui Display Co., Ltd.	Suzhou, China		100	%		December 31	July 1, 2016	Manufacture and sell LCD module and LCD monitor sets		CNY 637
LG DISPLAY FUND I LLC(*)	Wilmington, U.S.A.		100	%		December 31	May 1, 2018	Invest in venture business and acquire technologies		USD 45
LG Display High-Tech (China) Co., Ltd.	Guangzhou, China		70	%		December 31	July 11, 2018	Manufacture and sell display products		CNY 15,600

(*) For the year ended December 31, 2021, the Controlling Company contributed W38,565 million in cash for the capital increase of LG DISPLAY FUND I LLC. There was no change in the Controlling Company’s percentage of ownership in LG DISPLAY FUND I LLC as a result of this additional investment.

In addition to the above subsidiaries, the Controlling Company has invested W127,400 million in MMT (Money Market Trust), which is controlled by the Controlling Company.

11

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

1. Reporting Entity, Continued

(c) Summary of financial information of subsidiaries as of and for the years ended December 31, 2021 and 2020 is as follows:

(In millions of won)	December 31, 2021						2021
Subsidiaries	Total assets		Total liabilities		Total shareholders’ equity		Sales		Net income (loss)
LG Display America, Inc.	W	1,891,725		1,865,145		26,580		13,585,364		(159	)
LG Display Germany GmbH		614,248		597,574		16,674		2,107,714		2,732
LG Display Japan Co., Ltd.		482,445		475,847		6,598		2,332,536		731
LG Display Taiwan Co., Ltd.		472,948		450,519		22,429		2,171,271		2,282
LG Display Nanjing Co., Ltd.		2,072,881		1,103,251		969,630		1,892,179		109,201
LG Display Shanghai Co., Ltd.		575,263		562,025		13,238		934,122		(14,074	)
LG Display Guangzhou Co., Ltd.		4,792,782		3,480,019		1,312,763		3,371,505		128,300
LG Display Shenzhen Co., Ltd.		115,545		108,635		6,910		530,023		(10,404	)
LG Display Singapore Pte. Ltd.		520,448		511,128		9,320		2,049,047		1,498
L&T Display Technology (Fujian) Limited		432,190		359,239		72,951		1,307,982		(8,946	)
LG Display Yantai Co., Ltd.		898,976		411,696		487,280		630,996		(11,857	)
Nanumnuri Co., Ltd.		9,907		6,673		3,234		26,068		898
LG Display (China) Co., Ltd.		2,651,061		355,541		2,295,520		2,175,878		380,788
Unified Innovative Technology, LLC		2,814		16		2,798		—		(182	)
LG Display Guangzhou Trading Co., Ltd.		703,527		693,105		10,422		1,535,452		1,753
Global OLED Technology, LLC		61,074		9,963		51,111		9,322		(5,714	)
LG Display Vietnam Haiphong Co., Ltd.		4,093,339		3,148,557		944,782		2,592,983		270,441
Suzhou Lehui Display Co., Ltd.		332,856		181,707		151,149		614,070		7,040
LG DISPLAY FUND I LLC		43,294		33		43,261		—		49
LG Display High-Tech (China) Co., Ltd.		6,803,960		3,713,739		3,090,221		2,817,308		125,446
	W	27,571,283		18,034,412		9,536,871		40,683,820		979,823

12

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

1. Reporting Entity, Continued

(In millions of won)	December 31, 2020						2020
Subsidiaries	Total assets		Total liabilities		Total shareholders’ equity		Sales		Net income (loss)
LG Display America, Inc.	W	1,375,795		1,351,562		24,233		11,383,528		8,063
LG Display Germany GmbH		309,702		295,599		14,103		1,440,763		1,890
LG Display Japan Co., Ltd.		365,295		359,114		6,181		1,923,132		1,105
LG Display Taiwan Co., Ltd.		319,284		301,210		18,074		1,453,734		2,363
LG Display Nanjing Co., Ltd.		1,476,667		710,717		765,950		1,487,428		99,311
LG Display Shanghai Co., Ltd.		373,503		348,609		24,894		814,964		7,237
LG Display Poland Sp. z o.o.		—		—		—		—		17,216
LG Display Guangzhou Co., Ltd.		4,081,473		3,025,937		1,055,536		2,506,152		107,163
LG Display Shenzhen Co., Ltd.		50,255		34,421		15,834		580,638		4,924
LG Display Singapore Pte. Ltd.		499,158		492,045		7,113		1,176,876		2,105
L&T Display Technology (Fujian) Limited		323,801		242,939		80,862		1,168,972		10,796
LG Display Yantai Co., Ltd.		791,520		345,930		445,590		966,393		56,735
Nanumnuri Co., Ltd.		5,659		3,323		2,336		21,062		631
LG Display (China) Co., Ltd.		2,424,290		737,462		1,686,828		1,907,421		(12,279	)
Unified Innovative Technology, LLC		2,740		14		2,726		—		(1,094	)
LG Display Guangzhou Trading Co., Ltd.		931,858		924,180		7,678		1,372,006		1,050
Global OLED Technology, LLC		66,691		14,369		52,322		8,899		(4,934	)
LG Display Vietnam Haiphong Co., Ltd.		3,319,103		2,708,904		610,199		1,829,840		164,533
Suzhou Lehui Display Co., Ltd.		281,293		152,665		128,628		531,464		2,494
LG DISPLAY FUND I LLC		3,127		11		3,116		—		(4,353	)
LG Display High-Tech (China) Co., Ltd.		7,005,932		4,346,187		2,659,745		1,280,924		51,489
	W	24,007,146		16,395,198		7,611,948		31,854,196		516,445

13

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

1. Reporting Entity, Continued

(d) Information of subsidiaries(before elimination of intercompany transactions) which have significant non-controlling interests as of and for the years ended December 31, 2021 and 2020 are as follows:

(In millions of won)
	2021
	LG Display (China) Co., Ltd.			LG Display High-Tech (China) Co., Ltd.
Percentage of ownership in non-controlling interest (%)		30			30
Current assets	W	1,987,880			1,551,346
Non-current assets		663,181			5,252,614
Current liabilities		324,075			1,261,412
Non-current liabilities		31,466			2,452,327
Net assets		2,295,520			3,090,221
Book value of non-controlling interests		680,757			925,848
Revenue	W	2,175,878			2,817,308
Profit (Loss) for the year		380,788			125,446
Profit (Loss) attributable to non-controlling interests		114,301			37,803
Cash flows from operating activities	W	890,435			709,243
Cash flows from investing activities		(619,615	)		(315,176	)
Cash flows from financing activities		(439,390	)		(665,170	)
Effect of exchange rate fluctuations on cash held		23,538			19,972
Net decrease in cash and cash equivalents		(145,032	)		(251,131	)
Cash and cash equivalents at January 1		276,802			290,461
Cash and cash equivalents at December 31		131,770			39,330
Dividends distributed to non-controlling interests	W	—			—

14

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

1. Reporting Entity, Continued

(In millions of won)
	2020
	LG Display (China) Co., Ltd.			LG Display High-Tech (China) Co., Ltd.
Percentage of ownership in non-controlling interest (%)		30			30
Current assets	W	1,573,028			1,544,816
Non-current assets		851,262			5,461,116
Current liabilities		326,785			1,588,688
Non-current liabilities		410,677			2,757,499
Net assets		1,686,828			2,659,745
Book value of non-controlling interests		498,084			796,537
Revenue	W	1,907,421			1,280,924
Profit (Loss) for the year		(12,279	)		51,489
Profit (Loss) attributable to non-controlling interests		(3,684	)		15,447
Cash flows from operating activities	W	138,692			134,484
Cash flows from investing activities		(686,387	)		(841,413	)
Cash flows from financing activities		436,936			826,940
Effect of exchange rate fluctuations on cash held		5,367			(1,501	)
Net increase (decrease) in cash and cash equivalents		(105,392	)		118,510
Cash and cash equivalents at January 1		382,194			171,951
Cash and cash equivalents at December 31		276,802			290,461
Dividends distributed to non-controlling interests	W	12,086			—

15

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

2. Basis of Presenting Financial Statements

(a) Statement of Compliance

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 26, 2022, which will be submitted for approval to the shareholders’ meeting to be held on March 23, 2022.

(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

Each subsidiary’s financial statements within the Group are presented in the subsidiary’s functional currency, which is the currency of the primary economic environment in which each subsidiary operates. The consolidated financial statements are presented in Korean won, which is the Controlling Company’s functional currency.

(d) Use of Estimates and Judgments

The preparation of the consolidated financial statements in conformity with K-IFRSs requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

Information about critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the consolidated financial statements is included in the following notes:

• Financial instruments (Note 3(f))

• Impairment assessment of non-financial assets (Note 3(k), 10)

• Deferred tax assets and liabilities (Note 3(s), 24)

16

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

2. Basis of Presenting Financial Statements, Continued

(d) Use of Estimates and Judgments, Continued

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next 12 months is included in the following notes:

• Provisions (Note 3(m), 13)

• Inventories (Note 3(e), 7)

• Property, plant and equipment (Note 9)

• Intangible assets (Impairment assessment of non-financial assets) (Note 10)

• Employee benefits (Note 12)

• Deferred tax assets and liabilities (Note 24)

3. Summary of Significant Accounting Policies

The significant accounting policies followed by the Group in the preparation of its consolidated financial statements are as follows:

(a) Changes in Accounting Policies

The Group has early adopted the amendments to K-IFRS No. 1016, Property, Plant and Equipment: Proceeds before Intended Use, from January 1, 2021. A number of other new standards are effective from January 1, 2021 but they do not have a significant effect on the Group’s consolidated financial statements.

(i) Retrospective application of changes in accounting policies

Before the application of the amendments to K-IFRS No. 1016, directly attributable costs of acquiring property, plant and equipment included the costs of testing whether it is functioning properly, after deducting the net proceeds from selling items produced using the property, plant and equipment. However, after the application of the amendments, the proceeds from selling any such produced items and the cost of producing those items are recognized in profit or loss. K-IFRS No. 1002 Inventories is applied in identifying and measuring these production costs. The amendments also clarify that testing whether an item of property, plant and equipment is functioning properly means assessing its technical and physical performance rather than assessing its financial performance – e.g. assessing whether the property, plant and equipment has achieved a certain level of operating margin.

The Group applied amendments retrospectively, but only to items of property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after January 1, 2020, the beginning of the earliest period presented in the accompanying consolidated financial statements, and the Group restated and presented the consolidated financial statements as of and for the year ended December 31, 2020 as follows.

17

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

3. Summary of Significant Accounting Policies, Continued

(a) Changes in Accounting Policies, Continued

(ii) Impact on the consolidated financial statements

Before the application of the amendments to K-IFRS 1016, the Group deducted net proceeds from selling items produced during the testing whether the property, plant and equipment is functioning properly from its acquisition cost. However, upon the application of the amendments to K-IFRS No. 1016, the Group reclassified the proceeds from selling any such produced items from the testing of property, plant and equipment as sales and the cost of those items as cost of sales and restated the financial statements by adjusting the depreciation for reduction in acquisition cost of property, plant and equipment and related income taxes. Adjusted amount of each account in the comparative financial statements from retrospective application of the changes in the accounting policy is as follows:

i) Impacts on the consolidated statement of financial position as of December 31, 2020

(In millions of won)
	As previously reported		Adjustments			As restated
Assets
Property, plant and equipment	W	20,147,051		(7,348	)		20,139,703
Deferred tax assets		2,273,677		1,837			2,275,514
	W	22,420,728		(5,511	)		22,415,217
Equity
Retained earnings	W	7,524,297		(5,511	)		7,518,786

ii) Impacts on the consolidated statement of financial position as of December 31, 2021

(In millions of won)
	Amounts before adoption of change		Adjustments			As reported
Assets
Property, plant and equipment	W	20,564,161		(5,715	)		20,558,446
Deferred tax assets		2,306,263		1,429			2,307,692
	W	22,870,424		(4,286	)		22,866,138
Equity
Retained earnings	W	8,545,807		(4,286	)		8,541,521

There are no impacts on the consolidated statement of financial position as of January 1, 2020 due to the change in accounting policy.

18

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

3. Summary of Significant Accounting Policies, Continued

(a) Changes in Accounting Policies, Continued

(ii) Impact on the consolidated financial statements, Continued

iii) Impacts on the consolidated statement of comprehensive income for the year ended December 31, 2020

(In millions of won, except earnings per share)
	As previously reported			Adjustments			As restated
Revenue	W	24,230,124			31,437			24,261,561
Cost of sales		(21,587,554	)		(38,785	)		(21,626,339	)
Gross profit	W	2,642,570			(7,348	)		2,635,222
Operating loss	W	(29,117	)		(7,348	)		(36,465	)
Loss before income tax	W	(595,098	)		(7,348	)		(602,446	)
Income tax benefit		(524,462	)		(1,837	)		(526,299	)
Loss for the year	W	(70,636	)		(5,511	)		(76,147	)
Basic and diluted earnings (loss) per share (in won)	W	(250	)		(15	)		(265	)

iv) Impacts on the consolidated statement of comprehensive income for the year ended December 31, 2021

(In millions of won, except earnings per share)
	Amounts before adoption of change			Adjustments		As reported
Revenue	W	29,878,043			—		29,878,043
Cost of sales		(24,574,572	)		1,633		(24,572,939	)
Gross profit	W	5,303,471			1,633		5,305,104
Operating Income	W	2,228,975			1,633		2,230,608
Profit before income tax	W	1,717,252			1,633		1,718,885
Income tax expense		384,933			408		385,341
Profit for the year	W	1,332,319			1,225		1,333,544
Basic earnings per share (in won)	W	3,312			3		3,315
Diluted earnings per share (in won)	W	3,126			4		3,130

19

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

3. Summary of Significant Accounting Policies, Continued

(a) Changes in Accounting Policies, Continued

(ii) Impact on the consolidated financial statements, Continued

v) Impacts on the consolidated statement of changes in equity for the year ended December 31, 2020

- As previously reported

(In millions of won)
	Attributable to owners of the Controlling Company
	Retained earnings			Sub-total			Total equity
Balances at January 1, 2020	W	7,503,312			11,340,483			12,488,281
Loss for the year		(89,342	)		(89,342	)		(70,636	)
Balances at December 31, 2020	W	7,524,297			11,401,043			12,736,939

- Adjustments

(In millions of won)
	Attributable to owners of the Controlling Company
	Retained earnings			Sub-total			Total equity
Balances at January 1, 2020	W	—			—			—
Loss for the year		(5,511	)		(5,511	)		(5,511	)
Balances at December 31, 2020	W	(5,511	)		(5,511	)		(5,511	)

- As restated

(In millions of won)
	Attributable to owners of the Controlling Company
	Retained earnings			Sub-total			Total equity
Balances at January 1, 2020	W	7,503,312			11,340,483			12,488,281
Loss for the year		(94,853	)		(94,853	)		(76,147	)
Balances at December 31, 2020	W	7,518,786			11,395,532			12,731,428

20

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

3. Summary of Significant Accounting Policies, Continued

(a) Changes in Accounting Policies, Continued

vi) Impacts on the consolidated statement of cash flows for the year ended December 31, 2020

(In millions of won)
	As reported			Adjustment			Restated
Net cash provided by operating activities(*)	W	2,286,948			(8,164	)		2,278,784
Net cash used in investing activities(*)		(2,319,316	)		8,164			(2,311,152	)

(*) The net proceeds from selling items produced during the test are reclassified from net cash used in investing activity to net cash provided by operating activity.

There are no impact on net cash provided by operating activities and net cash used in investing activities in the consolidated statement of cash flows for the year ended December 31, 2021 due to the change in accounting policy.

(b) Consolidation

(i) Business Combinations

The Group accounts for business combinations using the acquisition method except for a combination of entities or businesses under common control. The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired. If the aggregate sum of consideration transferred and non-controlling interest exceeds the fair value of identifiable net asset, the Group recognizes goodwill; if not, then the Group recognizes gain on a bargain purchase. Any goodwill that arises is tested annually for impairment. Transaction costs are expensed as incurred, except if related to the issue of debt or equity instruments in accordance with K-IFRS No. 1032 and K-IFRS No. 1109. The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognized in profit or loss.

21

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

3. Summary of Significant Accounting Policies, Continued

(b) Consolidation, Continued

(ii) 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 commences until the date on which control ceases.

(iii) 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 Controlling 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.

(iv) Loss of Control

If the Controlling Company loses control of subsidiaries, the Controlling 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 Controlling Company recognizes any investment retained in the former subsidiaries at its fair value when control is lost.

(v) Associates and joint ventures (equity method investees)

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 has 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 Controlling 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.

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Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

3. Summary of Significant Accounting Policies, Continued

(b) Consolidation, Continued

(vi) 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.

(c) Foreign Currency Transaction and 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 retranslated to the functional currency at the exchange rate on the reporting date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was originally determined. Foreign currency differences arising on retranslation 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 exchange rates at the reporting date. 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 the at each reporting date’s exchange rate.

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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

3. Summary of Significant Accounting Policies, Continued

(d) 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.

(e) 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.

(f) 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: amortized cost; FVOCI – debt investment; FVOCI – equity investments; or 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.

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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

3. Summary of Significant Accounting Policies, Continued

(f) 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.

On initial recognition of an equity investments that is not held for trading, the Group may irrevocably elect to present subsequent changes in the investment’s fair value in OCI. This election is made on an investment-by-investment basis.

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 transaction 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.

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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

3. Summary of Significant Accounting Policies, Continued

(f) 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.

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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

3. Summary of Significant Accounting Policies, Continued

(f) Financial Instruments, Continued

Derecognition

The Group derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, it transfers the rights to receive the contractual cash flows of the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred, or it transfers or does not retain substantially all the risks and rewards of ownership of a transferred asset, and does not retain control of the transferred 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.

Interest rate benchmark reform

In case the basis for determining the contractual cash flows of a financial asset or financial liability measured at amortized cost changed as a result of interest rate benchmark reform, the Group updates the effective interest rate of the financial asset or financial liability to reflect the change that is required by the reform if both of the following conditions are met:

• the change is necessary as a direct consequence of the reform; and

• the new basis for determining the contractual cash flows is economically equivalent to the previous basis – i.e. the basis immediately before the change.

When changes were made to a financial asset or financial liability in addition to changes to the basis for determining the contractual cash flows required by interest rate benchmark reform, the Group first updates the effective interest rate of the financial asset or financial liability to reflect the change that is required by interest rate benchmark reform. After that, the Group applies the policies on accounting for modifications to the additional changes.

Offset

Financial assets and liabilities are offset and the net amount is presented in the consolidated statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

(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 or 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.

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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

3. Summary of Significant Accounting Policies, Continued

(f) Financial Instruments, Continued

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, 2020, non-derivative financial liabilities comprise 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.

(iii) Share Capital

The Group issued common stocks and they are classified as equity. Incremental costs directly attributable to the issuance of common stocks are recognized as a deduction from equity, net of tax effects. Capital contributed in excess of par value upon issuance of common stocks is classified as share premium within equity.

(iv) 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 it does not designate the derivative hedging instrument and the hedged item as the hedge relationship between them anymore; if the hedging instrument expires or is sold, terminated or exercised; or if the hedge no longer meets the criteria for hedge accounting.

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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

3. Summary of Significant Accounting Policies, Continued

(f) 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 it does not designate the derivative hedging instrument and the hedged item as the hedge relationship between them anymore; 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.

The Group is applying cash flow hedge accounting by designating expected foreign currency denominated sales arising from forecast export transactions as hedging items and the derivative instruments related to forward exchange as hedging instruments. The effective portion of changes in the fair value of the derivative is recognized in equity and the amount accumulated in equity is reclassified to revenue in the same period which forecast sales occur.

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.

(g) 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.

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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

3. Summary of Significant Accounting Policies, Continued

(g) 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.

Estimated useful lives of the assets are as follows:

	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.

(h) 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 Group borrows funds specifically for 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.

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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

3. Summary of Significant Accounting Policies, Continued

(i) 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 income of the period in which it becomes receivable.

(j) 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 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:

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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

3. Summary of Significant Accounting Policies, Continued

(j) 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.

(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.

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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

3. Summary of Significant Accounting Policies, Continued

(j) Intangible Assets, Continued

	Estimated useful lives (years)
Intellectual property rights	5, 10, (*1)
Rights to use electricity, water and gas supply facilities	10
Software	4, (*1)
Customer relationships	7, 10
Technology	10
Development costs	(*2)
Condominium and golf club memberships	Indefinite

(*1) Software license and patent royalty 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 of capitalized development costs are recognized in research and development expenses in the consolidated statement of comprehensive income (loss).

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.

(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).

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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

3. Summary of Significant Accounting Policies, Continued

(k) Impairment, Continued

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

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.

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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

3. Summary of Significant 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. 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 pre-tax 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.

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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

3. Summary of Significant 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 of 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.

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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

3. Summary of Significant 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 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.

If an arrangement contains lease and non-lease components, then the Group applies K-IFRS No. 1115 to allocate the consideration in the contract.

At the commencement date, the Group recognizes assets held under a finance lease in its 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’.

37

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

3. Summary of Significant 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 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 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.

38

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

3. Summary of Significant 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 defined contribution plans. The Group’s net obligation in respect of its defined benefit plan is calculated by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. The fair value of any plan assets is deducted.

The calculation is performed annually by an independent actuary using the projected unit credit method. The discount rate is the yield at the reporting date on high quality corporate bonds that have maturity dates approximating the terms of the Group’s obligations and that are denominated in the same currency in which the benefits are expected to be paid. The Group recognizes all actuarial gains and losses arising from defined benefit plans in retained earnings immediately.

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) now comprises: interest cost on the defined benefit obligation, interest income on plan assets, and interest on the effect on 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.

39

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

3. Summary of Significant 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 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 17 to these consolidated financial statements.

40

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

3. Summary of Significant Accounting Policies, Continued

(r) Finance Income and Finance Costs

Finance income comprises interest income on funds invested (including debt instruments measured at FVOCI), dividend income, gains on disposal of debt instruments measured at FVOCI, changes in fair value of financial assets at FVTPL, and gains on hedging instruments that are recognized in profit or loss. 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 comprise interest expense on borrowings, unwinding of the discount on provisions, gain and losses from financial assets measured at FVTPL, impairment losses recognized on financial assets, and losses on hedging instruments that are recognized in profit or loss. 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 current tax payable or receivable 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.

41

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

3. Summary of Significant Accounting Policies, Continued

(s) Income Tax, Continued

The Group recognizes a deferred tax liability for all taxable temporary differences associated with investments in subsidiaries, associates, and interests in joint ventures, 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.

Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

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 (Loss) Per Share

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

(u) Standards issued but not yet effective

A number of amended standards are effective for annual periods beginning after January 1, 2021 and earlier application is permitted; however, the Group has not early adopted the amended standards in preparing these consolidated financial statements.

(i) Amendment of Reference to the Definition of an Asset and a Liability in the Conceptual Framework (Amendments to K-IFRS No. 1103, Business Combinations);

These amendments replace the reference to the definitions of an asset and a liability in the Conceptual Framework issued in 2007 to 2018 and added an exception to the recognition principle in K-IFRS No. 1103, Business Combinations, for liabilities and contingent liabilities that would be within the scope of K-IFRS No. 1037, Provisions, Contingent Liabilities and Contingent Assets, and K-IFRS No. 2121, Levies, to apply the recognition criteria specified in those standards.

These amendments are effective for annual periods beginning on January 1, 2022, with early adoption permitted.

42

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

3. Summary of Significant Accounting Policies, Continued

(u) Standards issued but not yet effective, Continued

(ii) Classification of Liabilities as Current or Non-current (Amendments to K-IFRS No. 1001, Presentation of Financial Statements)

These amendments clarify that an entity has a right to defer settlement of the liability at the end of the reporting period if it complies with the conditions at that date and classification of a liability is unaffected by the likelihood that the entity will exercise its right to defer settlement of the liability for at least 12 months after the reporting period.

In addition, settlement of a liability includes transferring the Group’s own equity instruments to the counterparty but they do not affect its classification as current or non-current if the entity classifies the option as an equity instrument, recognizing it separately from the liability as an equity component of a compound financial instrument.

These amendments are effective for annual periods beginning on January 1, 2023, with early adoption permitted. The Group is currently assessing the impacts of the application.

(iii) Onerous Contracts – Cost of Fulfilling a Contract (Amendments to K-IFRS No. 1037, Provisions, Contingent Liabilities and Contingent Assets)

These amendments specify the scope of “the unavoidable costs of meeting the obligations under the contract” is “the costs that relate directly to the contracts” (the incremental costs of fulfilling the contract and an allocation of other costs that relate directly to fulfilling contracts).

These amendments are effective for annual periods beginning on January 1, 2022, with early adoption permitted.

(iv) Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to K-IFRS No. 1012, Income Taxes)

These amendments specify the scope of the initial recognition exemption when assets and liabilities arise to equal amount from a single transaction. These amendments require an entity to recognize the resulting deferred tax liability or asset if the transaction give rise to equal taxable and deductible temporary differences although it is not a business combination and affects neither accounting profit nor taxable profit(loss). These amendments are effective for annual periods beginning on January 1, 2023, with early adoption permitted.

Of deferred taxes which give rise to a right-of-use asset and lease liability, the Group is currently applying an approach which results in similar conclusion to these amendments except that deferred tax is presented on a net basis. Upon the adoption of the amendments, the Group expects to recognize separate deferred tax assets and liabilities for right of use assets and lease liabilities and it will be applied retrospectively.

43

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

3. Summary of Significant Accounting Policies, Continued

(u) Standards issued but not yet effective, Continued

(v) Definition of Materiality (Amendments to K-IFRS No. 1001, Presentation of Financial Statement)

These amendments specify the definition of materiality. Information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements. These amendments are effective for annual periods beginning on January 1, 2023, with early adoption permitted.

(vi) Definition of Accounting Estimates (Amendments to K-IFRS No. 1008, Accounting Policies, Changes in Accounting Estimates and Errors)

These amendments removed the definition of ‘change in accounting estimates’, and introduced the term ‘accounting estimates’ by defining them as monetary amounts in financial statements that are subject to measurement uncertainty and clarifying that a change in an estimation technique or a valuation technique used to develop accounting estimates is a change in accounting estimate. These amendments are effective for annual periods beginning on January 1, 2023, with early adoption permitted.

(vii) Annual Improvements to K-IFRS Standards 2018-2020

Annual improvements to K-IFRS standards 2018-2020 is effective for annual periods beginning on January 1, 2022, with early adoption permitted. The Group does not expect that such amendments have a material effect on the Group’s consolidated financial statements.

• K-IFRS No. 1001, First-time Adoption of International Financial Reporting Standards: Subsidiary as a First-time Adopter

• K-IFRS No. 1009, Financial Instruments: Fees in the ‘10 percent’ Test for Derecognition of Financial Liabilities

• K-IFRS No. 1116, Leases: Lease Incentives

• K-IFRS No. 1041, Agriculture: Taxation in Fair Value Measurements

The Group is currently assessing the impacts of the application of above amended standards on the Group’s financial position and business performance and management believes that the application of the amended standards are expected to have no significant impact on the consolidated financial statements of the Group, except for the amendments to K-IFRS No. 1001, Presentation of Financial Statements.

44

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

4. Cash and Cash Equivalents and Deposits in Banks

Cash and cash equivalents and deposits in banks as of December 31, 2021 and December 31, 2020 are as follows:

(In millions of won)
	December 31, 2021		December 31, 2020
Current assets
Cash and cash equivalents
Cash	W	1,122		156
Demand deposits		3,540,475		4,217,943
	W	3,541,597		4,218,099
Deposits in banks
Time deposits	W	2,600		1,800
Restricted deposits (*)		740,705		76,852
	W	743,305		78,652
Non-current assets
Deposits in banks
Restricted deposits (*)	W	11		11

(*) Includes funds deposited under agreements on mutually beneficial cooperation to aid LG Group companies’ suppliers, restricted deposits pledged to enforce the Group’s investment plans upon the receipt of grants from Gumi city and Gyeongsangbuk-do, restricted deposits pledged to guarantee a subsidiary’s borrowings and others.

45

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

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

(a) Trade accounts and notes receivable as of December 31, 2021 and December 31, 2020 are as follows:

(In millions of won)
	December 31, 2021		December 31, 2020
Due from third parties	W	3,818,980		3,054,471
Due from related parties		755,809		463,041
	W	4,574,789		3,517,512

(b) Other accounts receivable as of December 31, 2021 and December 31, 2020 are as follows:

(In millions of won)
	December 31, 2021		December 31, 2020
Current assets
Non-trade receivables, net	W	108,875		140,616
Accrued income		13,024		3,864
	W	121,899		144,480
Non-current assets
Long-term non-trade receivables	W	2,376		—
	W	124,275		144,480

Due from related parties included in other accounts receivable, as of December 31, 2021 and 2020 are W2,846 million and W21,189 million, respectively.

46

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

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

(c) The aging of trade accounts and notes receivable, and other accounts receivable as of December 31, 2021 and December 31, 2020 are as follows:

(In millions of won)	December 31, 2021
	Book value				Allowance for impairment
	Trade accounts and notes receivable		Other accounts receivable		Trade accounts and notes receivable			Other accounts receivable
Current	W	4,575,354		124,877		(1,204	)		(1,932	)
1-15 days past due		566		822		—			(6	)
16-30 days past due		10		44		—			—
31-60 days past due		61		16		—			—
More than 60 days past due		2		521		—			(67	)
	W	4,575,993		126,280		(1,204	)		(2,005	)

(In millions of won)	December 31, 2020
	Book value				Allowance for impairment
	Trade accounts and notes receivable		Other accounts receivable		Trade accounts and notes receivable			Other accounts receivable
Current	W	3,516,891		143,674		(1,047	)		(1,740	)
1-15 days past due		1,638		1,023		—			(8	)
16-30 days past due		30		522		—			—
31-60 days past due		—		782		—			(8	)
More than 60 days past due		—		257		—			(22	)
	W	3,518,559		146,258		(1,047	)		(1,778	)

The movement in the allowance for impairment in respect of trade accounts and notes receivable and other accounts receivable for the years ended December 31, 2021 and 2020 are as follows:

(In millions of won)	2021				2020
	Trade accounts and notes receivable		Other accounts receivable		Trade accounts and notes receivable		Other accounts receivable
Balance at the beginning of the year	W	1,047		1,778		460		3,322
(Reversal of) bad debt expense		157		227		587		(480	)
Write-off		—		—		—		(1,064	)
Balance at the end of the year	W	1,204		2,005		1,047		1,778

47

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

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

(d) Other current assets as of December 31, 2021 and December 31, 2020 are as follows:

(In millions of won)
	December 31, 2021		December 31, 2020
Advanced payments	W	44,907		34,808
Prepaid expenses		67,540		63,972
Value added tax refundable		608,476		693,623
Right to recover returned goods		7,440		11,063
	W	728,363		803,466

48

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

6. Other Financial Assets

Other financial assets as of December 31, 2021 and 2020 are as follows:

(In millions of won)	December 31, 2021		December 31, 2020
Current assets
Financial assets at fair value through profit or loss
Convertible securities	W	1,573		—
Derivatives(*1)		12,741		9,252
	W	14,314		9,252
Cash flow hedging derivatives
Derivatives(*2)	W	905		—
Financial assets at fair value through other comprehensive income
Debt instruments
Government bonds	W	27		24
Financial assets carried at amortized cost
Deposits	W	23,581		8,696
Short-term loans		22,518		28,491
Lease receivables		6,858		5,940
	W	52,957		43,127
	W	68,203		52,403
Non-current assets
Financial assets at fair value through profit or loss
Equity instruments	W	48,805		13,223
Convertible securities		1,185		2,377
Derivatives(*1)		52,871		111
	W	102,861		15,711
Financial assets at fair value through other comprehensive income
Debt instruments
Government bonds	W	21		48
Financial assets carried at amortized cost
Deposits	W	22,039		22,251
Long-term loans		19,939		13,899
Lease receivables		11,351		16,322
	W	53,329		52,472
	W	156,211		68,231

(*1) Represents cross currency interest rate swap contracts and others entered into by the Group to hedge currency and interest rate risks with respect to foreign currency denominated borrowings and bonds. The contracts are not designated as hedging instruments.

(*2) Represents forward exchange contracts entered into by the Group to hedge exchange rate risks with respect to forecast sales in foreign currency. The contracts are designated as hedging instruments.

49

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

7. Inventories

Inventories as of December 31, 2021 and December 31, 2020 are as follows:

(In millions of won)	December 31, 2021		December 31, 2020
Finished goods	W	1,180,329		785,282
Work-in-process		1,202,548		733,071
Raw materials		786,739		491,432
Supplies		180,759		160,871
	W	3,350,375		2,170,656

For the years ended December 31, 2021 and 2020, the amount of inventories recognized as cost of sales including inventory write-downs and usage of inventory write-downs are as follows:

(In millions of won)	2021			2020
Inventories recognized as cost of sales	W	24,572,939			21,626,339
Inventory write-downs		224,576			213,932
Usage of inventory write-downs		(213,932	)		(472,885	)

There were no significant reversals of inventory write-downs recognized during the years ended December 31, 2021 and 2020.

50

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

8. Investments in Equity Accounted Investees

(a) Associates as of December 31, 2021 and December 31, 2020 are as follows:

(In millions of won)
Associates	Location	Fiscal year end	Date of incorporation	Business	2021					2020
					Percentage of ownership			Carrying amount		Percentage of ownership			Carrying amount
Paju Electric Glass Co., Ltd.	Paju, South Korea	December 31	January 2005	Manufacture glass for display		40	%	W	48,398		40	%	W	47,262
WooRee E&L Co., Ltd.	Ansan, South Korea	December 31	June 2008	Manufacture LED back light unit packages		13	%		11,947		14	%		10,540
YAS Co., Ltd.	Paju, South Korea	December 31	April 2002	Develop and manufacture deposition equipment for OLEDs		15	%		27,337		15	%		24,493
AVATEC Co., Ltd.	Daegu, South Korea	December 31	August 2000	Process and sell glass for display		15	%		20,708		14	%		20,196
Arctic Sentinel, Inc.	Los Angeles, U.S.A.	March 31	June 2008	Develop and manufacture tablet for kids		10	%		—		10	%		—
Cynora GmbH (*1)	Bruchsal, Germany	December 31	March 2003	Develop organic emitting materials for displays and lighting devices		11	%		—		12	%		2,609

51

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

8. Investments in Equity Accounted Investees, Continued

(In millions of won)
							2021					2020
Associates	Location	Fiscal year end		Date of incorporation		Business	Percentage of ownership			Carrying amount		Percentage of ownership			Carrying amount
Material Science Co., Ltd. (*2)	Seoul, South Korea		December 31		January 2014	Develop, manufacture, and sell materials for display		10	%	W	3,679		10	%	W	3,791
Nanosys Inc. (*3)	Milpitas, U.S.A.		December 31		July 2001	Develop, manufacture, and sell materials for display		4	%		14,650		3	%		5,660
										W	126,719				W	114,551

(*1) During 2021, the Controlling Company recognized an impairment loss of W2,609 million as finance cost for the investments in Cynora GmbH.

(*2) During 2021, the Controlling Company recognized a reversal of impairment loss of W636 million as finance income for the difference between the carrying amount and the recoverable amount of investments in Material Science Co., Ltd.

(*3) During 2021, the Controlling Company recognized a reversal of impairment loss of W4,065 million as finance income for the difference between the carrying amount and the recoverable amount of investments in Nanosys Inc.

52

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

8. Investments in Equity Accounted Investees, Continued

Although the Controlling Company’s respective share interests in WooRee E&L Co., Ltd., YAS Co., Ltd., AVATEC Co., Ltd., Arctic Sentinel, Inc., Cynora GmbH, Material Science Co., Ltd. and Nanosys Inc. are below 20%, the Controlling Company is able to exercise significant influence through its right to appoint a director to the board of directors of each investee. Accordingly, the investments in these investees have been accounted for using the equity method.

As of December 31, 2021, the market value of the Group’s share in WooRee E&L Co., Ltd., YAS Co., Ltd., and AVATEC Co., Ltd., all of which are listed in KOSDAQ, are W11,424 million, W32,600 million and W40,100 million, respectively.

Dividends income recognized from equity method investees for the years ended December 31, 2021 and 2020 amounted to W4,068 million and W8,239 million, respectively.

53

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

8. Investments in Equity Accounted Investees, Continued

(b) Summary of financial information as of and for the years ended December 31, 2021 and 2020 of the significant associate is as follows:

(i) Paju Electric Glass Co., Ltd.

(In millions of won)	December 31, 2021			December 31, 2020
Total assets	W	227,616			204,880
Current assets		175,730			143,086
Non-current assets		51,886			61,794
Total liabilities		105,023			85,224
Current liabilities		93,561			64,921
Non-current liabilities		11,462			20,303
Revenue		425,516			307,756
Profit for the year		13,364			9,615
Other comprehensive income (loss)		(1,258	)		(409	)
Total comprehensive income		12,106			9,206

(c) Reconciliation from financial information of the significant associate to its carrying value in the consolidated financial statements as of December 31, 2021 and 2020 is as follows:

(i) As of December 31, 2021

(In millions of won)
Company	Net asset		Ownership interest			Net asset (applying ownership interest)		Goodwill		Intra-group transaction			Impairment loss		Book value
Paju Electric Glass Co., Ltd.	W	122,593		40	%		49,037		—		(639	)		—		48,398

(ii) As of December 31, 2020

(In millions of won)
Company	Net asset		Ownership interest			Net asset (applying ownership interest)		Goodwill		Intra-group transaction			Impairment loss		Book value
Paju Electric Glass Co., Ltd.	W	119,656		40	%		47,862		—		(600	)		—		47,262

54

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

8. Investments in Equity Accounted Investees, Continued

(d) Book value of other associates, in aggregate, as of December 31, 2021 and 2020 is as follows:

(i) As of December 31, 2021

(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	78,321		2,473		6,867		9,340

(ii) As of December 31, 2020

(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	67,289		8,510		(7	)		8,503

55

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

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, 2021 and 2020 are as follows:

(In millions of won)
		2021
Company		January 1		Dividends received			Equity income on investments		Other comprehensive income (loss)			Other gain		December 31
Associates	Paju Electric Glass Co., Ltd.	W	47,262		(3,668	)		5,307		(503	)		—		48,398
	Others		67,289		(400	)		2,473		6,867			2,092		78,321
		W	114,551		(4,068	)		7,780		6,364			2,092		126,719

(In millions of won)
		2020
Company		January 1		Dividends received			Equity income on investments		Other comprehensive loss			Other gain		December 31
Associates	Paju Electric Glass Co., Ltd.	W	50,697		(7,739	)		4,035		(164	)		433		47,262
	Others		58,914		(500	)		8,510		(7	)		372		67,289
		W	109,611		(8,239	)		12,545		(171	)		805		114,551

56

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

9. Property, Plant and Equipment

(a) Changes in property, plant and equipment for the year ended December 31, 2021 are as follows:

(In millions of won)
	Land			Buildings and structures			Machinery and equipment			Furniture and fixtures			Construction- in-progress (*1)			Right-of-use asset			Others			Total
Acquisition cost as of January 1, 2021	W	442,822			7,420,854			48,166,361			735,329			6,122,364			184,036			1,021,641			64,093,407
Accumulated depreciation as of January 1, 2021		—			(3,457,052	)		(37,581,293	)		(600,912	)		—			(69,130	)		(697,134	)		(42,405,521	)
Accumulated impairment loss as of January 1, 2021		—			(116,596	)		(1,317,770	)		(8,250	)		(76,637	)		(3,999	)		(24,931	)		(1,548,183	)
Book value as of January 1, 2021	W	442,822			3,847,206			9,267,298			126,167			6,045,727			110,907			299,576			20,139,703
Additions		—			—			—			—			3,651,064			63,655			—			3,714,719
Depreciation		—			(394,416	)		(3,188,694	)		(72,065	)		—			(62,983	)		(259,095	)		(3,977,253	)
Disposals		(8,975	)		(17,655	)		(30,046	)		(44	)		(6,899	)		(7	)		(40,501	)		(104,127	)
Impairment loss		—			3,897			(15,287	)		(3	)		620			—			(7,191	)		(17,964	)
Others (*2)		—			704,753			1,784,733			110,083			(2,910,055	)		—			299,534			(10,952	)
Government grants received		—			(5,491	)		(80,432	)		(60	)		—			—			—			(85,983	)
Effect of movements in exchange rates		—			167,236			682,295			15,041			11,141			8,294			16,296			900,303
Book value as of December 31, 2021	W	433,847			4,305,530			8,419,867			179,119			6,791,598			119,866			308,619			20,558,446
Acquisition cost as of December 31, 2021	W	433,847			8,583,015			50,288,095			863,241			6,867,667			235,436			1,184,889			68,456,190
Accumulated depreciation as of December 31, 2021	W	—			(4,068,333	)		(40,637,254	)		(675,638	)		—			(111,382	)		(853,778	)		(46,346,385	)
Accumulated impairment loss as of December 31, 2021	W	—			(209,152	)		(1,230,974	)		(8,484	)		(76,069	)		(4,188	)		(22,492	)		(1,551,359	)

(*1) As of December 31, 2021, construction-in-progress mainly relates to construction of manufacturing facilities.

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

57

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

9. Property, Plant and Equipment, Continued

(b) Changes in property, plant and equipment for the year ended December 31, 2020 are as follows:

(In millions of won)
	Land			Buildings and structures			Machinery and equipment			Furniture and fixtures			Construction- in-progress (*1)			Right-of-use asset			Others			Total
Acquisition cost as of January 1, 2020	W	454,035			7,381,156			43,604,721			899,053			9,618,256			169,133			823,101			62,949,455
Accumulated depreciation as of January 1, 2020		—			(3,154,387	)		(34,810,300	)		(753,987	)		—			(51,581	)		(534,013	)		(39,304,268	)
Accumulated impairment loss as of January 1, 2020		—			(120,876	)		(1,223,648	)		(8,278	)		(171,929	)		(4,302	)		(28,509	)		(1,557,542	)
Book value as of January 1, 2020	W	454,035			4,105,893			7,570,773			136,788			9,446,327			113,250			260,579			22,087,645
Additions		—			—			—			—			2,090,747			51,754			—			2,142,501
Depreciation		—			(332,058	)		(3,035,681	)		(67,391	)		—			(54,069	)		(236,986	)		(3,726,185	)
Disposals		(11,266	)		(31,936	)		(117,538	)		(2,963	)		—			—			(38,345	)		(202,048	)
Impairment loss		—			1,074			(30,815	)		8			(3,801	)		—			(4,960	)		(38,494	)
Others (*2)		53			117,900			4,976,266			59,758			(5,473,330	)		—			319,353			—
Government grants received		—			(12,647	)		(93,825	)		—			(11,869	)		—			—			(118,341	)
Effect of movements in exchange rates		—			(1,020	)		(1,882	)		(33	)		(2,347	)		(28	)		(65	)		(5,375	)
Book value as of December 31, 2020	W	442,822			3,847,206			9,267,298			126,167			6,045,727			110,907			299,576			20,139,703
Acquisition cost as of December 31, 2020	W	442,822			7,420,854			48,166,361			735,329			6,122,364			184,036			1,021,641			64,093,407
Accumulated depreciation as of December 31, 2020	W	—			(3,457,052	)		(37,581,293	)		(600,912	)		—			(69,130	)		(697,134	)		(42,405,521	)
Accumulated impairment loss as of December 31, 2020	W	—			(116,596	)		(1,317,770	)		(8,250	)		(76,637	)		(3,999	)		(24,931	)		(1,548,183	)

(*1) As of December 31, 2020, construction-in-progress mainly relates to construction of manufacturing facilities.

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

(c) Capitalized borrowing costs and capitalization rate for the years ended December 31, 2021 and 2020 are as follows:

(In millions of won)
	2021			2020
Capitalized borrowing costs	W	64,606			191,876
Capitalization rate		3.69	%		4.14	%

58

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

10. Intangible Assets and Non-financial Assets Impairment

(a) Changes in intangible assets for the year ended December 31, 2021 are as follows:

(In millions of won)	Intellectual property rights			Software			Member- ships			Development costs			Construction- in-progress			Customer relationships			Technology			Good- will			Others (*2)			Total
Acquisition cost as of January 1, 2021	W	1,247,057			1,180,719			39,350			2,865,264			12,067			59,176			11,074			103,526			13,083			5,531,316
Accumulated amortization as of January 1, 2021		(781,703	)		(976,747	)		—			(2,352,680	)		—			(37,491	)		(11,074	)		—			(13,082	)		(4,172,777	)
Accumulated impairment loss as of January 1, 2021		(29,151	)		(9,539	)		(9,450	)		(210,631	)		—			(21,685	)		—			(57,995	)		—			(338,451	)
Book value as of January 1, 2021	W	436,203			194,433			29,900			301,953			12,067			—			—			45,531			1			1,020,088
Additions - internally developed		—			—			—			362,897			—			—			—			—			—			362,897
Additions - external purchases		681,222			23,240			742			—			127,621			—			1,689			—			—			834,514
Amortization (*1)		(190,842	)		(101,545	)		—			(230,891	)		—			—			(169	)		—			(1	)		(523,448	)
Disposals		—			—			(2,750	)		—			—			—			—			—			—			(2,750	)
Impairment loss (*3)		(90	)		(2	)		—			(29,396	)		—			—			—			—			—			(29,488	)
Reversal of impairment loss		—			—			1,152			—			—			—			—			—			—			1,152
Transfer from construction-in-progress		—			119,543			—			(15,348	)		(119,543	)		—			—			—			—			(15,348	)
Effect of movements in exchange rates		1,825			(6,808	)		39			—			(583	)		—			—			2,808			—			(2,719	)
Book value as of December 31, 2021	W	928,318			228,861			29,083			389,215			19,562			—			1,520			48,339			—			1,644,898
Acquisition cost as of December 31, 2021	W	1,873,027			1,261,232			30,742			1,771,383			19,562			59,176			12,763			106,334			13,081			5,147,300
Accumulated amortization as of December 31, 2021	W	(915,764)			(1,023,062	)		—			(1,318,476	)		—			(37,491	)		(11,243	)		—			(13,081	)		(3,319,117	)
Accumulated impairment loss as of December 31, 2021	W	(28,945)			(9,309	)		(1,659	)		(63,692	)		—			(21,685	)		—			(57,995	)		—			(183,285	)

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

(*2) Others mainly consist of rights to use electricity and gas supply facilities.

(*3) The Group recognized an impairment loss amounting to W29,396million for development projects which are not likely to generate revenue.

59

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

10. Intangible Assets and Non-financial Assets Impairment, Continued

(b) Changes in intangible assets for the year ended December 31, 2020 are as follows:

(In millions of won)
	Intellectual property rights			Software			Member- ships			Development costs			Construction- in-progress			Customer relationships			Technology			Good- will			Others (*2)			Total
Acquisition cost as of January 1, 2020	W	959,683			1,097,290			56,612			2,580,777			15,245			59,176			11,074			105,414			13,080			4,898,351
Accumulated amortization as of January 1, 2020		(739,498	)		(890,281	)		—			(2,073,881	)		—			(37,491	)		(10,705	)		—			(13,079	)		(3,764,935	)
Accumulated impairment loss as of January 1, 2020		(29,151	)		(8,864	)		(10,560	)		(131,713	)		—			(21,685	)		—			(57,995	)		—			(259,968	)
Book value as of January 1, 2020	W	191,034			198,145			46,052			375,183			15,245			—			369			47,419			1			873,448
Additions - internally developed		—			—			—			284,487			—			—			—			—			—			284,487
Additions - external purchases		291,405			27,789			—			—			51,520			—			—			—			3			370,717
Amortization (*1)		(42,205	)		(86,466	)		—			(278,799	)		—			—			(369	)		—			(3	)		(407,842	)
Disposals		—			—			(17,252	)		—			—			—			—			—			—			(17,252	)
Impairment loss (*3)		—			(675	)		—			(78,918	)		—			—			—			—			—			(79,593	)
Reversal of impairment loss		—			—			1,110			—			—			—			—			—			—			1,110
Transfer from construction-in-progress		—			54,753			—			—			(54,753	)		—			—			—			—			—
Effect of movements in exchange rates		(4,031	)		887			(10	)		—			55			—			—			(1,888	)		—			(4,987	)
Book value as of December 31, 2020	W	436,203			194,433			29,900			301,953			12,067			—			—			45,531			1			1,020,088
Acquisition cost as of December 31, 2020	W	1,247,057			1,180,719			39,350			2,865,264			12,067			59,176			11,074			103,526			13,083			5,531,316
Accumulated amortization as of December 31, 2020	W	(781,703	)		(976,747	)		—			(2,352,680	)		—			(37,491	)		(11,074	)		—			(13,082	)		(4,172,777	)
Accumulated impairment loss as of December 31, 2020	W	(29,151	)		(9,539	)		(9,450	)		(210,631	)		—			(21,685	)		—			(57,995	)		—			(338,451	)

60

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

10. Intangible Assets and Non-financial Assets Impairment, Continued

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

(*2) Others mainly consist of rights to use electricity and gas supply facilities.

(*3) The Group recognized an impairment loss amounting to W78,918 million for development projects which are not likely to generate revenue.

(c) Development costs as of December 31, 2021 and 2020 are as follows:

(i) As of December 31, 2021

(In millions of won and in years)
Classification	Product type	Book Value
Development completed	TV	W	27,371
	IT		31,935
	Mobile and others		76,644
		W	135,950
Development in process	TV	W	73,667
	IT		66,904
	Mobile and others		112,694
		W	253,265
		W	389,215

(ii) As of December 31, 2020

(In millions of won and in years)
Classification	Product type	Book Value
Development completed	TV	W	20,803
	IT		51,784
	Mobile and others		33,097
		W	105,684
Development in process	TV	W	49,773
	IT		42,762
	Mobile and others		103,734
		W	196,269
		W	301,953

61

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

10. Intangible Assets and Non-financial Assets Impairment, Continued

(d) Impairment assessment on CGU with allocated goodwill

As of December 31, 2021, goodwill is allocated to the Group’s Display CGU which constitutes a large portion of the Group’s non-financial assets. The carrying amount of goodwill allocated to Display CGU is as follows:

(In millions of won)
	December 31, 2021		December 31, 2020
Display CGU	W	48,339		45,531

The recoverable amount of Display CGU is estimated 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 sales of the Group’s products used in the forecast was determined considering external sources and the Group’s past 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, growth rates for subsequent years (“terminal growth rate”), and discount rate. For Display CGU, the terminal growth rate and the discount rate in the estimation of value in use as of December 31, 2021 are as follows.

	Pre-tax discount rate(*)			Post-tax discount rate(*)			Terminal growth rate
Display CGU	W	10.5	%		8.4	%		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 five 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 five 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 which 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, the recoverable amount exceeds the carrying amount by W2,639,202 million. The value in use determined for this CGU is sensitive to the discount rate and terminal growth rate used in the discounted cash flow model. An increase in the discount rate by 1.67% or a decrease in terminal growth rate by 1.82% would result in the estimated recoverable amount to be equal to the carrying amount of the CGU.

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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

11. Financial Liabilities

(a) Financial liabilities as of December 31, 2021 and 2020 are as follows:

(In millions of won)
	December 31, 2021		December 31, 2020
Current
Short-term borrowings	W	613,733		394,906
Current portion of long-term borrowings and bonds		3,393,506		2,705,709
Derivatives (*1)		8,594		58,875
Cash flow hedging derivatives (*2)		13,400		—
Lease liabilities		40,479		35,534
	W	4,069,712		3,195,024
Non-current
Won denominated borrowings	W	2,173,500		2,435,000
Foreign currency denominated borrowings		5,487,091		6,584,658
Bonds		995,976		1,948,541
Derivatives (*1)		2,331		108,750
Lease liabilities		43,847		47,897
	W	8,702,745		11,124,846

(*1) Represents cross currency interest rate swap contracts and others entered into by the Group to hedge currency and interest rate risks with respect to foreign currency denominated borrowings and bonds. The contracts are not designated as hedging instruments.

(*2) Represents forward exchange contracts entered into by the Group to hedge exchange rate risks with respect to forecast sales in foreign currency. The contracts are designated as hedging instruments.                

(b) Short-term borrowings as of December 31, 2021 and 2020 are as follows.

(In millions of won and USD)
Lender	Annual interest rate as of December 31, 2021 (%)(*)		December 31, 2021		December 31, 2020
Standard Chartered Bank Korea Limited		—	W	—		326,400
Standard Chartered Bank Vietnam and others		3ML + 0.80		613,733		68,506
Foreign currency equivalent				USD 518		USD 363
			W	613,733		394,906

(*) ML represents Month LIBOR (London Inter-Bank Offered Rates)

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Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

11. Financial Liabilities, Continued

(c) Won denominated long-term borrowings as of December 31, 2021 and 2020 are as follows:

(In millions of won)
Lender	Annual interest rate as of December 31, 2021 (%)(*)		December 31, 2021			December 31, 2020
Woori Bank		—	W	—			60
Korea Development Bank and others		CD rate (91days) + 1.00~1.60, 1.90~3.25		2,785,000			3,272,500
Less current portion of long-term borrowings				(611,500	)		(837,560	)
			W	2,173,500			2,435,000

(*) CD represents certificate of deposit.

(d) Foreign currency denominated long-term borrowings as of December 31, 2021 and 2020 are as follows:

(In millions of won, USD and CNY)
Lender	Annual interest rate as of December 31, 2021 (%)(*)		December 31, 2021			December 31, 2020
The Export-Import Bank of Korea and others		3ML+1.20~2.40 6ML+1.25~1.43, 1.82~2.46	W	2,163,538			1,680,960
China Construction Bank and others		USD : 3ML+0.65~1.43 CNY : LPR(5Y)+0.34, LPR(1Y)-0.15~+ 0.15, 4.20		4,489,974			5,948,472
Foreign currency equivalent				USD 2,782			USD 2,742
				CNY 18,017			CNY 27,825
Less current portion of long-term borrowings			W	(1,166,421	)		(1,044,774	)
			W	5,487,091			6,584,658

(*) LPR represents Loan Prime Rate of People’s Bank of China.

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Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

11. Financial Liabilities, Continued

(e) Details of bonds issued and outstanding as of December 31, 2021 and 2020 are as follows:

(In millions of won and USD)
	Maturity		Annual interest rate as of December 31, 2021 (%)		December 31, 2021			December 31, 2020
Won denominated bonds at amortized cost(*1)
Publicly issued bonds		February 2022 ~ September 2026		2.29~2.95	W	1,320,000			1,320,000
Privately issued bonds		May 2022 ~ May 2033		3.25~4.25		160,000			160,000
Less discount on bonds						(2,534	)		(1,798	)
Less current portion						(599,825	)		(499,796	)
					W	877,641			978,406
Foreign currency denominated bonds at amortized cost (*2)
Publicly issued bonds		November 2021		—	W	—			326,400
Privately issued bonds		April 2023		3ML + 1.47		118,550			108,800
Foreign currency equivalent						USD 100			USD 400
Less discount on bonds						(215	)		(3,161	)
Less current portion						—			(323,579	)
					W	118,335			108,460
Financial liabilities at fair value through profit or loss
Foreign currency denominated convertible bonds (*3)		August 2024		1.50	W	1,015,760			861,675
Foreign currency equivalent						USD 857			USD 792
Less current portion						(1,015,760	)		—
					W	—			861,675
					W	995,976			1,948,541

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

(*2) Principal of the foreign currency denominated bonds is to be repaid at maturity and interests are paid quarterly or semi-annually.

(*3) Reclassified to current considering the bondholders’ right to redeem before maturity (put option).

65

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

11. Financial Liabilities, Continued

(f) Details of the convertible bonds issued by the Controlling Company and outstanding by the Controlling Company as of December 31, 2021 are as follows:

(In won, USD)
	Description
Type	Unsecured foreign currency denominated convertible bonds
Issuance amount	USD 687,800,000
Annual interest rate (%)	1.50
Issuance date	August 22, 2019
Maturity date	August 22, 2024
Interest payment	Payable semi-annually in arrear until maturity date
Principal redemption	1.  Redemption at maturity : Redeemed on the maturity date, at their outstanding principal amount, which has not been early redeemed or converted. 2.  Early redemption : The Controlling Company has a right to redeem before maturity (call option) or the bondholders have a right to require the Controlling Company to redeem before maturity (put option). At exercise of each option, the outstanding principal amount together with accrued but unpaid interest are to be redeemed.
Conversion price	W 19,845 per common share (subject to adjustment based on diluted effects of certain events)
Conversion period	From August 23, 2020 to August 12, 2024
Redemption at the option of the issuer (Call option)	-   On or at any time after 3 years from the issuance, if the closing price of the shares for any 20 trading days out of the 30 consecutive trading days is at least 130% of the applicable conversion price -   The aggregate principal amount of the convertible bonds outstanding is less than 10% of the aggregate principal amount originally issued, or -   In the event of certain changes in laws and other directives resulting in additional taxes for the holders
Redemption at the option of the bondholders (Put option)	On the third anniversary from the issuance date

The Controlling Company designated the convertible bonds as financial liabilities at fair value through profit or loss and recognized the change in fair value in profit or loss. The Controlling Company measures the convertible bond at fair value using the market price of convertible bonds disclosed on Bloomberg. The number of convertible shares as of December 31, 2021 is as follows:

(In won and No. of shares)
	December 31, 2021
Aggregate outstanding amount of the convertible bonds	W	813,426,670,000
Conversion price	W	19,845
Number of common shares to be issued at conversion		40,988,998

66

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Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

12. Employee Benefits

The Controlling Company and 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 Controlling Company or 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.

(a) Net defined benefit liabilities (defined benefit assets) recognized as of December 31, 2021 and 2020 are as follows:

(In millions of won)	December 31, 2021			December 31, 2020
Present value of partially funded defined benefit obligations	W	1,684,096			1,397,542
Fair value of plan assets		(1,750,783	)		(1,621,041	)
	W	(66,687)			(223,499	)
Defined benefit liabilities, net	W	1,589			1,498
Defined benefit assets, net	W	68,276			224,997

(b) Changes in the present value of the defined benefit obligations for the years ended December 31, 2021 and 2020 are as follows:

(In millions of won)	2021			2020
Defined benefit obligations at January 1	W	1,397,542			1,481,339
Current service cost		150,136			163,652
Interest cost		35,902			35,614
Remeasurements (before tax)		205,318			(155,700	)
Benefit payments		(101,973	)		(124,701	)
Net transfers from (to) related parties		(2,798	)		(2,645	)
Others		(31	)		(17	)
Defined benefit obligations at December 31	W	1,684,096			1,397,542

Weighted average remaining maturity of defined benefit obligations as of December 31, 2021 and 2020 are 15.63 years and 15.06 years, respectively.

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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

12. Employee Benefits, Continued

(c) Changes in fair value of plan assets for the years ended December 31, 2021 and 2020 are as follows:

(In millions of won)
	2021			2020
Fair value of plan assets at January 1	W	1,621,041			1,607,253
Expected return on plan assets		41,797			38,597
Remeasurements (before tax)		(15,483	)		(7,264	)
Contributions by employer directly to plan assets		201,417			101,462
Benefit payments		(97,989	)		(119,007	)
Fair value of plan assets at December 31	W	1,750,783			1,621,041

(d) Plan assets as of December 31, 2021 and 2020 are as follows:

(In millions of won)	December 31, 2021		December 31, 2020
Guaranteed deposits in banks	W	1,750,783		1,621,041

As of December 31, 2021, the Group maintains the plan assets primarily with Mirae Asset Securities Co., Ltd., KB Insurance Co., Ltd. and others.

(e) Expenses related to defined benefit plans recognized in profit or loss for the years ended December 31, 2021 and 2020 are as follows:

(In millions of won)	2021			2020
Current service cost	W	150,136			163,652
Net interest cost		(5,895	)		(2,983	)
	W144,241			160,669

Expenses are recognized in the consolidated statements of comprehensive income as follows:

(In millions of won)	2021		2020
Cost of sales	W	110,750		122,369
Selling expenses		6,631		8,505
Administrative expenses		16,496		17,875
Research and development expenses		10,364		11,920
	W144,241		160,669

68

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

12. Employee Benefits, Continued

(f) Remeasurements of net defined benefit liabilities (assets) included in other comprehensive income (loss) for the years ended December 31, 2021 and 2020 are as follows:

(In millions of won)	2021			2020
Balance at January 1	W	38,117			(72,326	)
Remeasurements
Actuarial profit or loss arising from:
Experience adjustment		(124,974	)		36,769
Demographic assumptions		(7,206	)		(2,584	)
Financial assumptions		(73,138	)		121,515
Return on plan assets		(15,483	)		(7,264	)
Group’s share of associates regarding remeasurements		(84	)		39
	W	(220,885	)		148,475
Income tax	W	57,438			(38,032	)
Balance at December 31	W	(125,330	)		38,117

(g) Principal actuarial assumptions as of December 31, 2021 and 2020 (expressed as weighted averages) are as follows:

	December 31, 2021			December 31, 2020
Expected rate of salary increase		3.7	%		2.9	%
Discount rate for defined benefit obligations		3.1	%		2.6	%

Assumptions regarding future mortality are based on published statistics and mortality tables. The current mortality underlying the values of the liabilities in the defined benefit plans are as follows:

		December 31, 2021			December 31, 2020
Teens	Males		0.00	%		0.00	%
	Females		0.00	%		0.00	%
Twenties	Males		0.01	%		0.01	%
	Females		0.00	%		0.00	%
Thirties	Males		0.01	%		0.01	%
	Females		0.00	%		0.00	%
Forties	Males		0.02	%		0.02	%
	Females		0.01	%		0.01	%
Fifties	Males		0.04	%		0.04	%
	Females		0.02	%		0.02	%

(h) Reasonably possible changes to respective relevant actuarial assumptions would have affected the defined benefit obligations by the following amounts as of December 31, 2021:

(In millions of won)	Defined benefit obligations
	1% increase			1% decrease
Discount rate for defined benefit obligations	W	(226,772	)		275,402
Expected rate of salary increase		270,635			(227,488	)

69

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Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

13. Provisions

Changes in provisions for the year ended December 31, 2021 are as follows:

(In millions of won)
	Warranties (*)			Others			Total
Balance at January 1, 2021	W	272,195			14,906			287,101
Additions (reversal)		216,873			(5,659	)		211,214
Usage		(231,942	)		—			(231,942	)
Balance at December 31, 2021	W	257,126			9,247			266,373
Current	W	164,184			9,247			173,431
Non-current	W	92,942			—			92,942

(*) Product warranties on defective products are normally applicable for warranty periods from the date of customer’s purchase. The provision is calculated by using historical and anticipated rates of warranty claims, and costs per claim to satisfy the Group’s warranty obligation.

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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

14. Contingent Liabilities and Commitments

(a) Legal Proceedings

Anti-trust litigations

Some individual claimants filed “follow-on” damages claims against the Group and other TFT-LCD manufacturers alleging violations of EU competition law. While the Group continues its vigorous defense of the various pending proceedings described above, as of December 31, 2021, the Group cannot reliably estimate the timing and amount of outflows of resources embodying economic benefits relating to the proceedings.

Solas OLED Ltd. Litigations

Between April 2019 and September 2020, Solas OLED Ltd. filed altogether four patent infringement actions, with two in the United States District Court for the Western District of Texas, one in the Mannheim District Court in Germany and one in the Beijing Intellectual Property Court in China, against the Controlling Company and television manufacturers. The actions in the United States and Germany also included the Controlling Company’s subsidiaries, LG Display America, Inc. and LG Display Germany GmbH, as defendants, respectively. In December 2020, the parties reached an agreement to amicably settle all claims and all patent infringement actions have been formally dismissed during the year ended December 31, 2021.

Others

The Group is involved in various lawsuits and disputes in addition to the pending proceedings 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 securitization of accounts receivable

The Controlling Company has agreements with Korea Development Bank and several other banks for accounts receivable sales negotiating facilities of up to an aggregate of USD 1,015 million (W1,203,283 million) in connection with the Controlling Company’s export sales transactions with its subsidiaries. As of December 31, 2021, there are no short-term borrowings that are outstanding but past due in connection with these agreements. In connection with all of the contracts in this paragraph, the Controlling Company has sold its accounts receivable with recourse.

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Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

14. Contingent Liabilities and Commitments, Continued

The Controlling Company and overseas subsidiaries have agreements with financial institutions for accounts receivables sales negotiating facilities. The respective maximum amount of accounts receivables that could be sold under the agreement and the amount of sold but not yet due accounts receivables by contract are as follows:

(In millions of USD and KRW)
Classification	Financial institutions	Credit limit				Not yet due
		Contractual amount		KRW equivalent		Contractual amount		KRW equivalent
Controlling Company	Shinhan Bank		KRW 90,000		90,000		—		—
			USD 10		11,855		USD 7		8,334
	Sumitomo Mitsui Banking Corporation		USD 20		23,710		—		—
	MUFG Bank		USD 180		213,390		USD 20		23,757
	BNP Paribas		USD 65		77,058		USD 9		10,839
	ING Bank		USD 90		106,695		—		—
			USD 365		522,708		USD 36		42,930
			KRW 90,000				—
Subsidiaries
LG Display Singapore Pte. Ltd.	Standard Chartered Bank		USD 330		391,215		USD 110		130,400
	United Overseas Bank Limited		USD 100		118,550		USD 70		82,983
	JPMorgan Chase Bank, N.A., Singapore Branch		USD 50		59,275		—		—
LG Display Taiwan Co., Ltd.	BNP Paribas		USD 15		17,783		—		—
	Australia and New Zealand Banking Group Ltd.		USD 70		82,985		USD 22		26,081
	KGI Bank Co., Ltd.		USD 30		35,565		—		—
LG Display Germany GmbH	BNP Paribas		USD 135		160,043		USD 50		59,289
	Commerzbank AG		USD 12		14,262		USD 5		6,141
	DZ Bank AG		USD 12		14,007		USD 9		10,103
	UniCredit Bank		USD 19		22,196		USD 8		10,012
LG Display America, Inc.	Hong Kong & Shanghai Banking Corp.		USD 400		474,200		USD 400		474,200
	Standard Chartered Bank		USD 600		711,300		USD 285		337,868
	Sumitomo Mitsui Banking Corporation		USD 150		177,825		USD 5		5,928
LG Display Japan Co., Ltd.	Chelsea Capital Corporation Tokyo Branch		USD 120		142,260		—		—
LG Display Guangzhou Trading Co., Ltd.	KEB Hana Bank (China) Company Limited		USD 30		35,565		—		—
			USD 2,073		2,457,031		USD 964		1,143,005
			USD 2,438				USD 1,000
			KRW 90,000		2,979,739		—		1,185,935

In connection with all of the contracts in the above table, the Group has sold its accounts receivable without recourse.

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Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

14. Contingent Liabilities and Commitments, Continued

Letters of credit

As of December 31, 2021, the Group entered into agreements with financial institutions in relation to the opening of letters of credit and the respective credit limits under the agreements are as follows:

(In millions of won and USD)
	Contractual amount		KRW equivalent
KEB Hana Bank		USD 250	W	296,375
Sumitomo Mitsui Banking Corporation		USD 50		59,275
Industrial Bank of Korea		USD 100		118,550
Industrial and Commercial Bank of China		USD 200		237,100
Shinhan Bank		USD 400		474,200
KB Kookmin Bank		USD 100		118,550
MUFG Bank		USD 100		118,550
The Export–Import Bank of Korea		USD 200		237,100
Standard Chartered Bank		USD 400		474,200
		USD 1,800	W	2,133,900

Payment guarantees

The Controlling Company obtained payment guarantees amounting to USD 2 million (W2,371 million) from Shinhan Bank for value added tax payments in Poland.

LG Display (China) Co., Ltd. and other subsidiaries are provided with payment guarantees from the China Construction Bank and other various banks amounting to CNY 1,189 million (W221,463 million), JPY 900 million (W9,272 million), EUR 2.5 million (W3,356 million), VND 51,408 million (W2,678 million), and USD 0.5 million (W593 million), respectively, for their local tax payments and utility payments.

License agreements

As of December 31, 2021, the Group has technical license agreements with Hitachi Display, Ltd. and others in relation to its LCD business and patent license agreement with Universal Display Corporation in relation to its OLED business. Also, the Group has a trademark license agreement with LG Corp. and other intellectual property license agreements with various companies as of December 31, 2021.

Pledged Assets

In connection with the borrowings amounting to CNY 14,494 million (W2,699,652 million) from China Construction Bank and others, as of December 31, 2021, the Group is providing its property, plant and equipment with carrying amount of W1,001,126 million as pledged assets.

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Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

15. Share Capital, Share Premium and Reserves

(a) Share capital and Share Premium

The Controlling Company is authorized to issue 500,000,000 shares of capital stock (par value W5,000), and as of December 31, 2021 and December 31, 2020, the number of issued common shares is 357,815,700. There have been no changes in the capital stock from January 1, 2020 to December 31, 2021.

The Group’s capital surplus consists of share premium. There have been no changes in share premium from January 1, 2020 to December 31, 2021.

(b) Reserves

Reserves consist mainly of the following:

Translation reserve

The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations.

Other comprehensive income (loss) from associates

The other comprehensive income (loss) from associates comprises the amount related to change in equity of investments in equity accounted investees.

Gain or loss on valuation of derivatives

Gain or loss on valuation of derivatives is the effective portion of the gains or losses from derivatives to which cash flow hedging accounting has been applied.

Reserves as of December 31, 2021 and 2020 are as follows:

(In millions of won)
	December 31, 2021			December 31, 2020
Loss on valuation of derivatives	W	(9,227	)		—
Foreign currency translation differences for foreign operations		566,651			(138,667	)
Other comprehensive loss from associates		(20,282	)		(24,779	)
	W	537,142			(163,446	)

74

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Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

15. Share Capital, Share Premium and Reserves, Continued

The movement in reserves for the years ended December 31, 2021 and 2020 are as follows:

(In millions of won)
	Loss on valuation of derivatives			Foreign currency translation differences for foreign operations			Other comprehensive income (loss) from associates (excluding remeasurements)			Total
January 1, 2020	W	—			(178,452	)		(24,569	)		(203,021	)
Change in reserves		—			39,785			(210	)		39,575
December 31, 2020	W	—			(138,667	)		(24,779	)		(163,446	)
January 1, 2021	W	—			(138,667	)		(24,779	)		(163,446	)
Change in reserves		(9,227	)		705,318			4,497			700,588
December 31, 2021	W	(9,227	)		566,651			(20,282	)		537,142

(c) Dividend

The Controlling Company decided to pay W232,580 million (W650 per share) of dividends after the reporting period and they will be submitted for approval to the shareholders’ meeting. Such dividends have not yet been paid and there are no related tax consequences.

16. Revenue

Details of revenue for the years ended December 31, 2021 and 2020 are as follows:

(In millions of won)
	2021		2020
Sales of goods	W	29,824,886		24,217,036
Royalties		13,977		14,167
Others		39,180		30,358
	W	29,878,043		24,261,561

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Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

17. Geographic and Other Information

The following is a summary of the Group’s operation by region based on the location of customers for the years ended December 31, 2021 and 2020.

(a) Revenue by geography

(In millions of won)
	2021		2020
Domestic	W	632,531		912,049
Foreign
China		19,866,707		16,685,746
Asia (excluding China)		3,256,126		2,297,290
United States		3,263,055		2,070,944
Europe (excluding Poland)		1,159,669		1,215,345
Poland		1,699,955		1,080,187
	W29,245,512		23,349,512
	W29,878,043		24,261,561

Sales to Company A and Company B amount to W12,019,534 million and W5,924,262 million, respectively, for the year ended December 31, 2021 (2020: W10,380,138 million and W4,252,696 million, respectively). The Group’s top ten end-brand customers together accounted for 86% of sales for the year ended December 31, 2021 (2020: 85%).

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Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

17. Geographic and Other Information, Continued

(b) Non-current assets by geography

(In millions of won)
	December 31, 2021				December 31, 2020
	Property, plant and equipment		Intangible assets		Property, plant and equipment		Intangible assets
Domestic	W	12,006,204		1,452,823		11,736,856		874,849
Foreign
China		6,393,129		83,655		6,723,704		39,396
Vietnam		2,146,652		19,954		1,663,807		7,688
Others		12,461		88,466		15,336		98,155
	W	8,552,242		192,075		8,402,847		145,239
	W	20,558,446		1,644,898		20,139,703		1,020,088

(c) Revenue by product and services    

(In millions of won)
	2021		2020
TV	W	9,466,192		6,737,654
IT		12,458,740		10,120,668
Mobile and others		7,953,111		7,403,239
	W	29,878,043		24,261,561

77

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

18. The Nature of Expenses and Others

The classification of expenses by nature for the years ended December 31, 2021 and 2020 are as follows:

(In millions of won)
	2021			2020
Changes in inventories	W	(1,179,232	)		(119,501	)
Purchases of raw materials, merchandise and others		15,207,659			12,636,633
Depreciation and amortization		4,500,701			4,134,027
Outsourcing		776,755			988,899
Labor		3,795,943			2,866,055
Supplies and others		1,235,473			900,019
Utility		1,029,953			885,972
Fees and commissions		789,885			679,475
Shipping		345,204			184,105
Advertising		126,335			113,547
Warranty		216,873			309,113
Travel		59,519			61,520
Taxes and dues		141,131			141,669
Others		720,467			785,070
	W	27,766,666			24,566,603

Total expenses consist of cost of sales, selling, administrative, research and development expenses and other non-operating expenses, excluding foreign exchange differences.

78

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

19. Selling and Administrative Expenses

Details of selling and administrative expenses for the years ended December 31, 2021 and 2020 are as follows:

(In millions of won)
	2021		2020
Salaries	W	387,414		294,055
Expenses related to defined benefit plans		22,859		26,449
Other employee benefits		86,757		68,402
Shipping		298,684		147,711
Fees and commissions		248,478		221,922
Depreciation		267,042		215,479
Taxes and dues		74,542		82,708
Advertising		126,335		113,547
Warranty		216,873		309,113
Insurance		16,654		12,985
Travel		6,935		8,296
Training		15,556		8,463
Others		84,323		63,821
	W	1,852,452		1,572,951

20. Personnel Expenses

Details of personnel expenses for the years ended December 31, 2021 and 2020 are as follows:

(In millions of won)
	2021		2020
Salaries and wages	W	3,138,798		2,326,792
Other employee benefits		589,598		444,090
Contributions to National Pension plan		68,962		67,241
Expenses related to defined benefit plans and defined contribution plans		144,739		161,285
	W	3,942,097		2,999,408

79

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

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

(a) Details of other non-operating income for the years ended December 31, 2021 and 2020 are as follows:

(In millions of won)
	2021		2020
Foreign currency gain	W	1,210,689		1,688,838
Gain on disposal of property, plant and equipment		19,367		37,835
Gain on disposal of intangible assets		196		111
Reversal of impairment loss on property, plant and equipment		1,121		—
Reversal of impairment loss on intangible assets		1,152		1,110
Rental income		1,978		3,629
Others		17,632		53,123
	W	1,252,135		1,784,646

(b) Details of other non-operating expenses for the years ended December 31, 2021 and 2020 are as follows:

(In millions of won)
	2021		2020
Foreign currency loss	W	1,161,628		1,730,703
Loss on disposal of property, plant and equipment		64,350		60,294
Impairment loss on property, plant, and equipment		19,085		38,494
Loss on disposal of intangible assets		—		368
Impairment loss on intangible assets		29,488		79,593
Loss on disposal of investments in subsidiaries		—		72,654
Donations		1,099		934
Others		5,209		16,240
	W	1,280,859		1,999,280

80

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

22. Finance Income and Finance Costs

(a) Finance income and costs recognized in profit or loss for the years ended December 31, 2021 and 2020 are as follows:

(In millions of won)
	2021		2020
Finance income
Interest income	W	88,888		69,651
Foreign currency gain		81,600		336,155
Reversal of impairment loss on investments		4,701		4,149
Gain on transaction of derivatives		9,393		24,759
Gain on valuation of derivatives		234,742		—
Gain on valuation of financial assets at fair value through profit or loss		6,511		4,072
	W	425,835		438,786
Finance costs
Interest expense	W	434,089		370,479
Foreign currency loss		381,132		194,384
Impairment loss on investments in equity accounted investees		2,609		3,344
Loss on repayment of borrowings		250		794
Loss on sale of trade accounts and notes receivable		4,877		5,258
Loss on transaction of derivatives		1,049		291
Loss on valuation of derivatives		21,795		187,344
Loss on valuation of financial assets at fair value through profit or loss		704		2,311
Loss on valuation of financial liabilities at fair value through profit or loss		68,421		36,798
Others		1,688		1,675
	W	916,614		802,678

81

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

23. Income Tax Expense (Benefit)

(a) Details of income tax expense (benefit) for the years ended December 31, 2021 and 2020 are as follows:

(In millions of won)
	2021			2020
Current tax expense (benefit)
Current year	W	199,591			117,215
Adjustment for prior years(*1)		163,570			(55,410	)
	W	363,161			61,805
Deferred tax expense (benefit)
Origination and reversal of temporary differences and others	W	60,233			(321,333	)
Change in unrecognized deferred tax assets(*2)		(38,053	)		(266,771	)
	W	22,180			(588,104	)
Income tax expense (benefit)	W	385,341			(526,299	)

(*1) Consist of taxable income adjustments related to the transfer price investigation and others and significant portion of such amounts were adjusted to reduce deferred tax expense (see Note 23(d)).

(*2) Change in unrecognized deferred tax assets consist of tax effect from recognizing previously unrecognized deferred tax assets in relation to tax credit carry forwards.

(b) Income taxes recognized directly in other comprehensive income or loss for the years ended December 31, 2021 and 2020 are as follows:

(In millions of won)	2021									2020
	Before tax			Tax expense			Net of tax			Before tax			Tax expense			Net of tax
Remeasurements of net defined benefit liabilities (assets)	W	(220,801	)		57,438			(163,363	)		148,436			(38,032	)		110,404
Gain (loss) on valuation of derivatives		(12,495	)		3,268			(9,227	)		—			—			—
Foreign currency translation differences for foreign operations		871,292			(1,503	)		869,789			48,181			—			48,181
Change in equity of equity method investee		6,364			(1,951	)		4,413			(172	)		—			(172	)
	W	644,360			57,252			701,612			196,445			(38,032	)		158,413

82

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

23. Income Tax Expense (Benefit), Continued

(c) Reconciliation of the actual effective tax rate for the years ended December 31, 2021 and 2020 is as follows:

(In millions of won)	2021					2020
Profit (loss) for the year	W			1,333,544					(76,147	)
Income tax expense (benefit)				385,341					(526,299	)
Profit (loss) before income tax				1,718,885					(602,446	)
Income tax expense (benefit) using the statutory tax rate of each country		30.37	%	521,954			31.55	%	(190,072	)
Non-deductible expenses		1.01	%	17,354			(2.29	%)	13,789
Tax credits		(3.28	%)	(56,439	)		12.46	%	(75,051	)
Change in unrecognized deferred tax assets(*1)		(2.21	%)	(38,053	)		44.28	%	(266,771	)
Adjustment for prior years (*2)		(0.49	%)	(8,349	)		9.20	%	(55,410	)
Effect on change in tax rate		(2.29	%)	(39,338	)		(1.23	%)	7,386
Others		(0.69	%)	(11,788	)		(6.61	%)	39,830
Income tax benefit	W			385,341					(526,299	)
Effective tax rate				22.42%					(*3)

(*1) Change in unrecognized deferred tax assets consist of tax effect from recognizing previously unrecognized deferred tax assets in relation to tax credit carry forwards.

(*2) Adjustment for prior years in 2021 consist of expected amount adjusted for transfer price investigation for prior periods and others.

(*3) Actual effective tax rate is not calculated due to income tax benefit.

(d) Tax uncertainties

In relation to the transfer price investigations related to five subsidiaries located in China, the mutual agreement procedures between tax authorities of the Republic of Korea and China for three subsidiaries have been completed and two subsidiaries are ongoing to resolve the double taxation effect. The Group recognized deferred tax assets for the amount which double taxation effect is expected to be eliminated from mutual agreement procedures, however, the Group is exposed to an uncertainty which may results in double taxation.

83

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

24. Deferred Tax Assets and Liabilities

(a) Unrecognized deferred tax liabilities

As of December 31, 2021, in relation to the taxable temporary differences on investments in subsidiaries amounting to W667,515 million, the Controlling Company did not recognize deferred tax liabilities since the Controlling Company is able to control the timing of the reversal of the temporary difference and it is probable that the temporary differences will not reverse in the foreseeable future.

(b) Unused tax credit carryforwards for which no deferred tax asset is recognized

Realization of deferred tax assets related to tax credit carryforwards which are primarily related to Korea is dependent on whether sufficient taxable income will be generated prior to their expiration and planned tax strategies are realizable. As of December 31, 2021, the amount of unused tax credit carryforwards for which no deferred tax asset is recognized and their expiration dates are as follows:

(In millions of won)
	Total		December 31, 2026		December 31, 2027		December 31, 2028		December 31, 2029		December 31, 2030		December 31, 2031
Tax credit carryforwards	W	182,617		16,710		75,626		40,824		40,965		4,593		3,899

84

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

24. Deferred Tax Assets and Liabilities, Continued

(c) Deferred tax assets and liabilities are attributable to the following:

(In millions of won)	Assets				Liabilities						Total
	December 31, 2021		December 31, 2020		December 31, 2021			December 31, 2020			December 31, 2021			December 31, 2020
Other accounts receivable, net	W	—		—		(17	)		(13	)		(17	)		(13	)
Inventories, net		68,679		60,539		—			—			68,679			60,539
Defined benefit liabilities, net		—		—		(26,642	)		(35,617	)		(26,642	)		(35,617	)
Investments in subsidiaries and associates		—		—		(233,552	)		(79,301	)		(233,552	)		(79,301	)
Accrued expenses		250,582		123,106		—			—			250,582			123,106
Property, plant and equipment		632,378		671,286		(28,886	)		(63,971	)		603,492			607,315
Intangible assets		17,450		19,469		(6,636	)		(8,000	)		10,814			11,469
Provisions		68,893		63,943		—			—			68,893			63,943
Other temporary differences		130,274		173,166		(19,596	)		(3,601	)		110,678			169,565
Tax loss carryforwards		958,624		953,209		—			—			958,624			953,209
Tax credit carryforwards		489,505		391,769		—			—			489,505			391,769
Deferred tax assets (liabilities)	W	2,616,385		2,456,487		(315,329	)		(190,503	)		2,301,056			2,265,984

85

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

24. Deferred Tax Assets and Liabilities, Continued

(d) Changes in deferred tax assets and liabilities for the years ended December 31, 2021 and 2020 are as follows:

(In millions of won)	January 1, 2020			Profit or loss			Other comprehensive loss			December 31, 2020			Profit or loss			Other comprehensive loss			December 31, 2021
Other accounts receivable, net	W	(4,364	)		4,351			—			(13	)		(4	)		—			(17	)
Inventories, net		89,522			(28,983	)		—			60,539			8,140			—			68,679
Defined benefit liabilities, net		—			2,415			(38,032	)		(35,617	)		(48,463	)		57,438			(26,642	)
Subsidiaries and associates		(20,015	)		(59,286	)		—			(79,301	)		(150,797	)		(3,454	)		(233,552	)
Accrued expenses		131,196			(8,090	)		—			123,106			127,476			—			250,582
Property, plant and equipment		669,909			(62,594	)		—			607,315			(3,823	)		—			603,492
Intangible assets		11,127			342			—			11,469			(655	)		—			10,814
Provisions		55,429			8,514			—			63,943			4,950			—			68,893
Other temporary differences		137,339			32,226			—			169,565			(62,155	)		3,268			110,678
Tax loss carryforwards		607,432			345,777			—			953,209			5,415			—			958,624
Tax credit carryforwards		38,337			353,432			—			391,769			97,736			—			489,505
Deferred tax assets (liabilities)	W	1,715,912			588,104			(38,032	)		2,265,984			(22,180	)		57,252			2,301,056

86

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

25. Earnings (Loss) per Share Attributable to Owners of the Controlling Company

(a) Basic earnings (loss) per share for the years ended December 31, 2021 and 2020 are as follows:

(In won and No. of shares)	2021		2020
Profit (loss) attributable to owners of the Controlling Company for the year	W	1,186,182,126,952		(94,852,991,844	)
Weighted-average number of common stocks outstanding		357,815,700		357,815,700
Basic earnings (loss) per share	W	3,315		(265	)

For the years ended December 31, 2021 and 2020, there were no events or transactions that resulted in changes in the number of common stocks used for calculating basic earnings (loss) per share.

(b) Diluted earnings per share for the year ended December 31, 2021 are as follows:

(In won and number of shares)
	2021
Profit attributable to owners of the Controlling Company	W	1,186,182,126,952
Adjustments:
Interest expenses of convertible bond, net of income tax		11,382,390,353
Loss on fair value valuation of convertible bond, net of income tax		50,521,798,972
Diluted profit attributable to owners of the Controlling Company		1,248,086,316,277
Weighted-average number of common stocks outstanding, after adjustment		398,804,698
Diluted earnings per share	W	3,130

Weighted-average number of common stocks outstanding, after adjustment, for measurement of diluted earnings per share is determined as follows:

(Number of shares)
	2021
Weighted-average number of common stocks outstanding	W	357,815,700
Adjustment: Number of common stocks to be issued from conversion		40,988,998
Weighted-average number of common stocks outstanding, after adjustment	W	398,804,698

Diluted loss per share is not different from basic loss per share as there is no dilution effects of potential common stocks for the year ended December 31, 2020 due to loss. In 2020, 40,988,998 shares of potential common stock to be issued from conversion were not considered from the calculation of weighted-average number of common stocks due to antidilution.

87

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

26. Financial Risk Management

The Group is exposed to credit risk, liquidity risk and market risks. 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, 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 of the Controlling Company, Korean won (KRW). The currencies in which these transactions primarily are denominated are USD, CNY, JPY, etc.

Interest on borrowings is accrued in the currency of the borrowing. Generally, borrowings are denominated in currencies that match the cash flows generated by the underlying operations of the Group, primarily KRW, USD and CNY.

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 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.

88

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

26. Financial Risk Management, Continued

i) Exposure to currency risk

The Group’s exposure to foreign currency risk based on notional amounts as of December 31, 2021 and 2020 is as follows:

(In millions)	December 31, 2021
	USD			JPY			CNY			TWD			EUR			PLN		VND
Cash and cash equivalents		1,138			195			11,024			29			3			3		44,525
Deposits in banks		—			—			3,564			—			—			—		—
Trade accounts and notes receivable		3,708			221			568			—			—			—		—
Other accounts receivables		24			71			297			4			—			—		15,828
Other assets denominated in foreign currencies		—			176			167			6			—			—		6,481
Trade accounts and notes payable		(2,170	)		(8,850	)		(2,343	)		—			—			—		(465,390	)
Other accounts payable		(1,227	)		(4,630	)		(2,203	)		(5	)		(5	)		—		(1,610,640	)
Financial liabilities		(4,257	)		—			(18,017	)		—			—			—		—
		(2,784	)		(12,817	)		(6,943	)		34			(2	)		3		(2,009,196	)
Cross currency interest rate swap contracts(*)		1,545			—			—			—			—			—		—
Net exposure		(1,239	)		(12,817	)		(6,943	)		34			(2	)		3		(2,009,196	)

(*) Of cross currency interest rate swap contracts, USD 100 million were entered into to hedge currency risk with respect to foreign currency denominated borrowings and USD 1,445 million were entered into to hedge currency risk and interest rate risk with respect to foreign currency denominated borrowings and bonds.

89

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

26. Financial Risk Management, Continued

(In millions)	December 31, 2020
	USD			JPY			CNY			TWD			EUR			PLN		VND			GBP
Cash and cash equivalents		1,795			164			13,382			34			7			4		33,843			—
Trade accounts and notes receivable		3,093			13			585			—			—			—		—			—
Other accounts receivables		52			93			222			3			6			—		9,773			—
Other assets denominated in foreign currencies		—			208			51			6			1			—		4,586			—
Trade accounts and notes payable		(1,948	)		(9,831	)		(2,037	)		—			—			—		(357,149	)		—
Other accounts payable		(268	)		(6,239	)		(2,018	)		(4	)		(8	)		—		(997,204	)		(2	)
Financial liabilities		(4,294	)		—			(27,825	)		—			—			—		—			—
		(1,570	)		(15,592	)		(17,640	)		39			6			4		(1,306,151	)		(2	)
Cross currency interest rate swap contracts		2,225			—			—			—			—			—		—			—
Net exposure		655			(15,592	)		(17,640	)		39			6			4		(1,306,151	)		(2	)

90

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

26. Financial Risk Management, Continued

Average exchange rates applied for the years ended December 31, 2021 and 2020 and the exchange rates at December 31, 2021 and December 31, 2020 are as follows:

(In won)	Average rate (year-to-date)				Reporting date spot rate
	2021		2020		December 31, 2021		December 31, 2020
USD	W	1,144.10		1,180.46		1,185.50		1,088.00
JPY		10.42		11.05		10.30		10.54
CNY		177.36		170.90		186.26		166.96
TWD		40.99		40.07		42.84		38.67
EUR		1,353.25		1,345.71		1,342.34		1,338.24
PLN		296.51		302.95		292.11		292.02
VND		0.0499		0.0508		0.0521		0.0471
GBP		1,573.89		1,513.48		1,600.25		1,482.40

ii) Sensitivity analysis

A weaker won, as indicated below, against the following currencies which comprise the Group’s assets or liabilities denominated in a foreign currency as of December 31, 2021 and 2020, 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 analysis assumes that all other variables, in particular interest rates, would remain constant. The changes in equity and profit or loss would have been as follows:

(In millions of won)	December 31, 2021						December 31, 2020
	Equity			Profit or loss			Equity			Profit or loss
USD (5 percent weakening)	W	(74,214	)		2,339			12,438			73,186
JPY (5 percent weakening)		(5,437	)		(3,288	)		(6,250	)		(5,194	)
CNY (5 percent weakening)		(64,732	)		172			(147,294	)		93
TWD (5 percent weakening)		70			5			75			—
EUR (5 percent weakening)		178			(858	)		250			377
PLN (5 percent weakening)		29			29			43			43
VND (5 percent weakening)		(3,865	)		(3,865	)		(2,230	)		(2,230	)
GBP (5 percent weakening)		—			—			(107	)		(107	)

A stronger won against the above currencies as of December 31, 2021 and 2020 would have had the equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant.

91

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

26. Financial Risk Management, Continued

iii) Derivatives for cash flow hedge

In relation to forecast export transactions, the Controlling Company uses derivative instruments to hedge fluctuations in future cash flows due to foreign currency exchange rate changes. As of December 31, 2021, there is no ineffective portion of the gain or loss on valuation of derivatives to which cash flow hedging accounting has been applied and gain and loss on valuation amounting to W905 million and W13,400 million, respectively, (contracted selling amount: USD 1,200 million, contracted exchange rate: W1,160~1,202.5) are recognized in other comprehensive income (loss). The expected settlement dates of derivative instrument contracts are within six months from December 31, 2021.

(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 manages interest rate risk by monitoring of 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 1,445 million (W1,713,048 million) and interest rate swap contracts amounting to W170,000 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, 2021 and 2020 is as follows:

(In millions of won)	December 31, 2021			December 31, 2020
Fixed rate instruments
Financial assets	W	4,284,950			4,296,823
Financial liabilities		(5,237,711	)		(5,875,729	)
	W	(952,761)			(1,578,906	)
Variable rate instruments
Financial liabilities	W	(7,426,095)			(8,193,085	)

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Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

26. Financial Risk Management, Continued

ii) Equity and profit or loss sensitivity analysis for variable rate instruments

As of December 31, 2021 and 2020, a change of 100 basis points in interest rates at the reporting date would have increased (decreased) equity and profit or loss 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)	Equity				Profit or loss
	1%p increase		1%p decrease		1%p increase			1%p decrease
December 31, 2021
Variable rate instruments (*)	W	(40,931)		40,931		(40,931	)		40,931
December 31, 2020
Variable rate instruments (*)	W	(45,352)		45,352		(45,352	)		45,352

(*) Financial instruments related to non-hedging interest rate swap are excluded from the calculation.

(iii) Managing interest rate benchmark reform and associated risks

A fundamental reform of major interest rate benchmarks is being undertaken globally, including the replacement of some interbank offered rates (IBORs) with alternative risk-free rates (referred to as ‘IBOR reform’). The publication of LIBOR, except overnight, 1-month, 3-month, 6-month, and 12-month USD LIBORs, was terminated as of December 31, 2021 and the five LIBORs, as mentioned above, will be discontinued by June 30, 2023.

The Group does not have financial instruments affected by discontinued LIBORs. The Group plans to change benchmark interest rate applied to some of its financial instruments from LIBORs to Secured Overnight Financing Rates (SOFRs), an alternative indicator interest rate. For these LIBOR-related financial instruments, the LIBORs are continued to be published. Meanwhile, in the case of the CD rate, an alternative reference rate was selected as the Korea Overnight Financing Repo Rate (KOFR) as part of the reform of the interest rate benchmark. However, unlike LIBOR, the termination of the publication of the CD rate is not scheduled, and the Group does not have plan to change to KOFR.

The Group is exposed to the legal risk of changing the contract of financial instruments due to the reform of the interest rate indicator, as well as the process and operational risks to deal with such changes. In addition, the Group is also exposed to the risk of monitoring the market trend on the alternative index interest rate and establishing a risk management strategy accordingly to manage the risk of the new alternative index interest rate. The Group manages and monitors the transition to alternative interest rate benchmark by evaluating the extent to which a contract references IBOR cash flows, whether such contracts will need to be amended as a result of IBOR reform and how to manage communication about IBOR reform with counterparties.

The Group monitors the transition to an alternative interest rate benchmark by reviewing the total amounts of contracts that have yet to transition to an alternative benchmark rate and the amounts of such contracts that include an appropriate fallback clause. The Group considers that a contract is not yet transitioned to an alternative benchmark rate when interest rate under the contract is indexed to a benchmark rate that is still subject to IBOR reform, even if it includes a fallback clause that deals with the cessation of the existing IBOR. As of December 31, 2021, the total amounts of unreformed contracts and those with appropriate fallback language are as follows, and the financial instruments that will be settled before June 30, 2023 are excluded:

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Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

26. Financial Risk Management, Continued

(In millions of won)	Total amount of unreformed contracts		Amount with appropriate fallback clause
Non-derivative financial liabilities
Borrowings	W	2,562,656		1,635,990
Derivative assets
Cross currency interest rate swap contracts	W	43,406		43,406
Derivative liabilities
Cross currency interest rate swap contracts	W	7,820		7,820

(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, do 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.

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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

26. Financial Risk Management, Continued

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk as of December 31, 2021 and 2020 is as follows:

(In millions of won)
	December 31, 2021		December 31, 2020
Financial assets carried at amortized cost
Cash equivalents	W	3,540,475		4,217,943
Deposits in banks		743,316		78,663
Trade accounts and notes receivable, net		4,574,789		3,517,512
Non-trade receivables		108,875		140,616
Accrued income		13,024		3,864
Deposits		45,620		30,947
Short-term loans		22,518		28,491
Long-term loans		19,939		13,899
Long-term non-trade receivables		2,376		—
Lease receivables		18,209		22,262
	W	9,089,141		8,054,197
Financial assets at fair value through profit or loss
Convertible securities	W	2,758		2,377
Derivatives		65,612		9,363
	W	68,370		11,740
Financial assets effective for cash flow hedging
Derivatives	W	905		—
Financial assets at fair value through other comprehensive income
Debt instruments	W	48		72
	W	9,158,464		8,066,009

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.

95

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

26. Financial Risk Management, Continued

(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 approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.

The Group has historically been able to satisfy its cash requirements from cash flows from operations and debt and equity financing. To the extent that the Group does not generate sufficient cash flows from operations to meet its capital requirements, the Group may rely on other financing activities, such as external long-term borrowings and offerings of debt instruments, equity-linked and other debt instruments. In addition, the Group maintains a line of credit with various banks.

The following are the contractual maturities of financial liabilities, including estimated interest payments, as of December 31, 2021.

(In millions of won)			Contractual cash flows in
	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	10,052,245		10,693,994		1,554,233		1,110,193		3,466,945		4,562,623		—
Bonds		2,611,561		2,531,468		575,029		884,996		329,661		652,467		89,315
Trade accounts and notes payable		4,814,055		4,814,055		4,468,682		345,373		—		—		—
Other accounts payable		2,327,257		2,329,820		2,201,225		128,595		—		—		—
Other accounts payable (enterprise procurement cards)(*)		1,074,089		1,074,089		1,023,130		50,959		—		—		—
Long-term other accounts payable		496,083		586,104		—		—		113,222		273,718		199,164
Security deposits received		11,199		11,199		2,860		5,592		2,747		—		—
Lease liabilities		84,326		90,920		28,216		16,116		22,959		16,241		7,388
Derivative financial liabilities
Derivatives	W	10,925		8,378		5,473		2,364		541		—		—
Derivatives for cash flow hedge		13,400		13,400		13,400		—		—		—		—
	W	21,495,140		22,153,427		9,872,248		2,544,188		3,936,075		5,505,049		295,867

96

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Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

26. Financial Risk Management, Continued

(*) Represents liabilities payable to credit card companies for utility expenses and others paid using enterprise procurement cards. The Group presented the payable to credit card companies as other accounts payable and disclosed related cash flows as operating activities since the Group is using the enterprise procurement cards through agreements with suppliers for transactions arising from purchasing of goods and services, the payment term is within a year from the purchase, as part of the normal operating cycle, and no security is provided. Change in liabilities related to procurement cards for the year ended December 31, 2021 is as follows:

(In millions of won)
	January 1, 2021		Change (Cash flows from operation activities)			December 31, 2021
Other accounts payable (enterprise procurement cards)	W	1,078,150		(4,061	)		1,074,089

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

97

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

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.

(In millions of won)
	December 31, 2021			December 31, 2020
Total liabilities	W	23,392,014			22,334,584
Total equity		14,762,501			12,731,428
Cash and deposits in banks (*1)		4,284,902			4,296,751
Borrowings (including bonds)		12,663,806			14,068,814
Total liabilities to equity ratio		158	%		175	%
Net borrowings to equity ratio (*2)		57	%		77	%

(*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.

98

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

26. Financial Risk Management, Continued

(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.

i) Current assets and liabilities

The carrying amounts approximate their fair value because of the short maturity of these instruments.

ii) Trade receivables and other receivables

The fair value of trade and other receivables is estimated as the present value of future cash flows, discounted at the market rate of interest at the reporting date. This fair value is determined for disclosure purposes. The carrying amounts of current receivables approximate their fair value.

iii) Investments in equity and debt securities

The fair value of marketable financial assets at FVTPL and FVOCI is determined by reference to their quoted closing bid price at the reporting date. The fair value of non-marketable instruments is determined using the results of fair value assessment performed by external valuation institutions and others.

iv) Non-derivative financial liabilities

Fair value, which is determined for disclosure purposes, except for the liabilities at FVTPL, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the reporting date.

v) Derivatives

The inputs used to measure the fair value of currency forward and cross currency interest rate swap are calculated based on the exchange rates and interest rates observable in the market at the reporting date.

99

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

26. Financial Risk Management, Continued

(ii) Fair values versus carrying amounts

The fair values of financial assets and liabilities, together with the carrying amounts shown in the consolidated statements of financial position as of December 31, 2021 and 2020 are as follows:

(In millions of won)
	December 31, 2021					December 31, 2020
	Carrying amounts		Fair values			Carrying amounts		Fair values
Financial assets carried at amortized cost
Cash and cash equivalents	W	3,541,597		(	*)		4,218,099		(	*)
Deposits in banks		743,316		(	*)		78,663		(	*)
Trade accounts and notes receivable		4,574,789		(	*)		3,517,512		(	*)
Non-trade receivables		108,875		(	*)		140,616		(	*)
Accrued income		13,024		(	*)		3,864		(	*)
Deposits		45,620		(	*)		30,947		(	*)
Short-term loans		22,518		(	*)		28,491		(	*)
Long-term loans		19,939		(	*)		13,899		(	*)
Long-term non-trade receivables		2,376		(	*)		—		(	*)
Lease receivables		18,209		(	*)		22,262		(	*)
Financial assets at fair value through profit or loss
Equity instruments	W	48,805		48,805			13,223		13,223
Convertible securities		2,758		2,758			2,377		2,377
Derivatives		65,612		65,612			9,363		9,363
Financial assets effective for cash flow hedging
Derivatives	W	905		905			—		—
Financial assets at fair value through other comprehensive income
Debt instruments	W	48		48			72		72
Financial liabilities at fair value through profit or loss
Derivatives	W	10,925		10,925			167,625		167,625
Convertible bonds		1,015,760		1,015,760			861,675		861,675
Financial liabilities effective for cash flow hedging
Derivatives	W	13,400		13,400			—		—
Financial liabilities carried at amortized cost
Borrowings	W	10,052,245		10,064,068			11,296,898		11,328,418
Bonds		1,595,801		1,596,044			1,910,241		1,923,517
Trade accounts and notes payable		4,814,055		(	*)		3,779,290		(	*)
Other accounts payable		3,401,346		(	*)		2,781,941		(	*)
Long-term other accounts payable		496,083		(	*)		30		(	*)
Security deposits received		11,199		(	*)		12,539		(	*)
Lease liabilities		84,326		(	*)		83,431		(	*)

(*) Excluded from disclosures as the carrying amount approximates fair value.

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Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

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

ii) Financial instruments measured at fair value

Fair value hierarchy classifications of the financial instruments that are measured at fair value as of December 31, 2021 and 2020 are as follows:

(In millions of won)	December 31, 2021
	Level 1		Level 2		Level 3		Total
Financial assets at fair value through profit or loss
Equity instruments	W	—		—		48,805		48,805
Convertible securities		—		—		2,758		2,758
Derivatives		—		65,612		—		65,612
Financial assets effective for cash flow hedging
Derivatives	W	—		905		—		905
Financial assets at fair value through other comprehensive income
Debt instruments	W	48		—		—		48
Financial liabilities at fair value through profit or loss
Derivatives	W	—		10,925		—		10,925
Convertible bonds		1,015,760		—		—		1,015,760
Financial liabilities effective for cash flow hedging
Derivatives	W	—		13,400		—		13,400

(In millions of won)	December 31, 2020
	Level 1		Level 2		Level 3		Total
Financial assets at fair value through profit or loss
Equity instruments	W	—		—		13,223		13,223
Convertible securities		—		—		2,377		2,377
Derivatives		—		9,363		—		9,363
Financial assets at fair value through other comprehensive income
Debt instruments	W	72		—		—		72
Financial liabilities at fair value through profit or loss
Derivatives	W	—		167,625		—		167,625
Convertible bonds		861,675		—		—		861,675

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Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

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 technique 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, 2021 and December 31, 2020 are as follows:

(In millions of won)	December 31, 2021						Valuation technique		Input
Classification	Level 1		Level 2		Level 3
Liabilities
Borrowings	W	—		—		10,064,068		Discounted cash flow		Discount rate
Bonds		—		—		1,596,044		Discounted cash flow		Discount rate

(In millions of won)	December 31, 2020						Valuation technique		Input
Classification	Level 1		Level 2		Level 3
Liabilities
Borrowings	W	—		—		11,328,418		Discounted cash flow		Discount rate
Bonds		—		—		1,923,517		Discounted cash flow		Discount rate

iv) The interest rates applied for determination of the above fair value as of December 31, 2021 and 2020 are as follows

	December 31, 2021			December 31, 2020
Borrowings, bonds and others		2.21~4.38	%		2.15~4.46	%

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Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

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 are presented as property, plant and equipment as of December 31, 2021 and 2020 (see Note 9(a)).

Changes in right-of-use assets for the years ended December 31, 2021 and 2020 are as follows:

(In millions of won)
	2021
	Buildings and structures			Land			Machinery and equipment			Vehicles			Others			Total
Balance at January 1	W	55,166			47,411			1,859			5,970			501			110,907
Additions and others		54,728			39			870			7,620			398			63,655
Depreciation		(51,368	)		(2,985	)		(1,469	)		(6,745	)		(416	)		(62,983	)
Disposals		(7	)		—			—			—			—			(7	)
Gain or loss on foreign currency translation		(2,352	)		9,952			70			217			407			8,294
Balance at December 31	W	56,167			54,417			1,330			7,062			890			119,866

(In millions of won)
	2020
	Buildings and structures			Land			Machinery and equipment			Vehicles			Others			Total
Balance at January 1	W	53,213			49,754			2,147			7,848			288			113,250
Additions and others		44,900			607			1,197			4,459			591			51,754
Depreciation		(42,923	)		(2,947	)		(1,485	)		(6,336	)		(378	)		(54,069	)
Gain or loss on foreign currency translation		(24	)		(3	)		—			(1	)		—			(28	)
Balance at December 31	W	55,166			47,411			1,859			5,970			501			110,907

103

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Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

27. Leases, Continued

(ii) Amounts recognized in profit or loss not from right-of-use assets for the years ended December 31, 2021 and 2020 are as follows:

(In millions of won)
	2021			2020
Interest on lease liabilities	W	(3,664)			(4,456	)
Income from sub-leasing right-of-use assets		712			896
Expenses relating to short-term leases		(824	)		(977	)
Expenses relating to leases of low-value assets		(577	)		(231	)

(iii) Changes in lease liabilities for the years ended December 31, 2021 and 2020 are as follows:

(In millions of won)
	2021			2020
Balance at January 1	W	83,431			88,512
Additions and others		64,172			52,663
Interest expense		3,664			4,456
Repayment of liabilities		(66,941	)		(62,200	)
Balance at December 31	W	84,326			83,431

(b) Leases as lessor

During the years ended December 31, 2021 and 2020, the Group recognized interest income on lease receivables of W712 million and W896 million, respectively.

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, 2021			December 31, 2020
6 months or less	W	3,688			3,306
6-12 months		3,688			3,306
1-2 years		7,376			6,612
2-5 years		4,303			10,469
Total undiscounted lease receivable		19,055			23,693
Unearned finance income		(846	)		(1,431	)
Net Investment in the lease		18,209			22,262

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Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

28. Changes in liabilities arising from financing activities

Changes in liabilities arising from financing activities for the year ended December 31, 2021 are as follows:

(In millions of won)
	January 1, 2021					Non-cash transactions
			Cash flows from financing activities			Reclassification			Gain or loss on foreign currency translation		Effective interest adjustment		Others		December 31, 2021
Short-term borrowings	W	394,906		148,640			—			70,187		—		—		613,733
Current portion of long-term borrowings and bonds		2,705,709		(4,344,208	)		4,582,430			370,826		10,078		68,671		3,393,506
Long-term borrowings		9,019,658		1,298,346			(3,112,568	)		455,155		—		—		7,660,591
Bonds		1,948,541		498,027			(1,469,862	)		9,732		9,538		—		995,976
Lease liabilities		83,431		(66,941	)		—			4,181		—		63,655		84,326
	W	14,152,245		(2,466,136	)		—			910,081		19,616		132,326		12,748,132

(*) Others include W68,421 million of loss on valuation of financial liabilities at fair value through profit or loss.

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Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

29. Related Parties and Others

(a) Related parties

Related parties as of December 31, 2021 are as follows:

Classification	Description
Associates(*)	Paju Electric Glass Co., Ltd. and others
Entity that has significant influence over the Controlling Company	LG Electronics Inc.
Subsidiaries of the entity that has significant influence over the Controlling Company	Subsidiaries of LG Electronics Inc.

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

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Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

29. Related Parties and Others, Continued

(b) Significant transactions such as sales of goods and purchases of raw material and outsourcing service and others, which occurred in the normal course of business with related parties for the years ended December 31, 2021 and 2020 are as follows:

(In millions of won)	2021
	Sales and others				Purchase and others
			Dividend income		Purchase of raw material and others		Acquisition of property, plant and equipment		Outsourcing fees		Other costs
Associates
AVATEC Co., Ltd.	W	—		200		713		—		72,156		1,485
Paju Electric Glass Co., Ltd.		—		3,668		365,400		—		—		2,734
WooRee E&L Co., Ltd.		—		—		13,541		—		—		79
YAS Co., Ltd.		—		200		10,337		54,071		—		9,824
Cynora GmbH		—		—		10		—		—		—
Material Science Co., Ltd.		—		—		187		—		—		—
	W	—		4,068		390,188		54,071		72,156		14,122
Entity that has significant influence over the Controlling Company
LG Electronics Inc.	W	270,396		—		19,805		395,654		—		130,924
Subsidiaries of the entity that has significant influence over the Controlling Company
LG Electronics India Pvt. Ltd.	W	97,475		—		—		—		—		418
LG Electronics Vietnam Haiphong Co., Ltd.		414,806		—		—		607		—		1,445

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Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

29. Related Parties and Others, Continued

(In millions of won)	2021
	Sales and others				Purchase and others
			Dividend income		Purchase of raw material and others		Acquisition of property, plant and equipment		Outsourcing fees		Other costs
LG Electronics Nanjing New Technology Co., Ltd.	W	449,390		—		—		—		—		1,263
LG Electronics RUS, LLC		98,812		—		—		—		—		1,141
LG Electronics do Brasil Ltda.		154,565		—		—		—		—		543
LG Innotek Co., Ltd.		3,753		—		26,874		451		—		85,471
HI-M Solutek Co., Ltd		—		—		44		—		—		5,662
LG Electronics Mexicalli, S.A. DE C.V.		269,305		—		—		—		—		89
LG Electronics Mlawa Sp. z o.o.		1,254,164		—		—		—		—		577
LG Electronics Reynosa, S.A. DE C.V.		1,256,107		—		—		—		—		1,011
LG Electronics Egypt S.A.E.		106,469		—		—		—		—		159
LG Electronics Japan, Inc.		—		—		—		10		—		5,334
P.T. LG Electronics Indonesia		537,944		—		—		—		—		574
LG Electronics Taiwan Taipei Co., Ltd.		5,046		—		—		—		—		659
LG Electronics Nanjing Vehicle Components Co., Ltd.		2,009		—		—		—		—		—
LG Technology Ventures LLC		—		—		—		—		—		4,411
Others		5		—		739		602		—		968
	W	4,649,850		—		27,657		1,670		—		109,725
	W	4,920,246		4,068		437,650		451,395		72,156		254,771

108

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

29. Related Parties and Others, Continued

(In millions of won)	2020
	Sales and others				Purchase and others
			Dividend income		Purchase of raw material and others		Acquisition of property, plant and equipment		Outsourcing fees		Other costs
Associates
AVATEC Co., Ltd.	W	22		200		80		—		74,070		1,112
Paju Electric Glass Co., Ltd.		—		7,739		299,737		—		—		2,862
WooRee E&L Co., Ltd.		—		—		13,857		—		—		35
YAS Co., Ltd.		—		300		6,648		22,603		—		3,790
Material Science Co., Ltd.		—		—		93		—		—		—
	W	22		8,239		320,415		22,603		74,070		7,799
Entity that has significant influence over the Controlling Company
LG Electronics Inc.	W	647,329		—		19,810		233,504		—		141,191
Subsidiaries of the entity that has significant influence over the Controlling Company
LG Electronics India Pvt. Ltd.	W	53,441		—		—		—		—		173
LG Electronics Vietnam Haiphong Co., Ltd.		332,977		—		—		—		—		1,138
LG Electronics Nanjing New Technology Co., Ltd.		439,674		—		—		—		—		1,333
LG Electronics RUS, LLC		95,465		—		—		—		—		303

109

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

29. Related Parties and Others, Continued

(In millions of won)	2020
	Sales and others				Purchase and others
			Dividend income		Purchase of raw material and others		Acquisition of property, plant and equipment		Outsourcing fees		Other costs
LG Electronics do Brasil Ltda.	W	111,710		—		—		—		—		230
LG Innotek Co., Ltd.		5,321		—		25,012		—		—		76,530
Qingdao LG Inspur Digital Communication Co., Ltd.		7,298		—		—		—		—		—
LG Electronics Mexicalli, S.A. DE C.V.		145,032		—		—		—		—		52
LG Electronics Mlawa Sp. z o.o.		729,135		—		—		—		—		1,188
LG Electronics Reynosa, S.A. DE C.V.		780,710		—		—		—		—		1,044
LG Electronics Egypt S.A.E.		69,853		—		—		—		—		375
LG Electronics Japan, Inc.		—		—		—		33		—		5,635
P.T. LG Electronics Indonesia		157,820		—		—		—		—		164
Others		5,030		—		229		—		—		7,632
	W	2,933,466		—		25,241		33		—		95,797
	W	3,580,817		8,239		365,466		256,140		74,070		244,787

110

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

29. Related Parties and Others, Continued

(c) Trade accounts and notes receivable and payable as of December 31, 2021 and 2020 are as follows:

(In millions of won)
	Trade accounts and notes receivable and others				Trade accounts and notes payable and others
	December 31, 2021		December 31, 2020		December 31, 2021		December 31, 2020
Associates	W
AVATEC Co., Ltd.		3		—		2,748		2,714
Paju Electric Glass Co., Ltd.		—		—		79,302		84,095
WooRee E&L Co., Ltd.		878		—		2,915		3,637
YAS Co., Ltd.		—		—		20,116		18,126
Material Science Co., Ltd.		—		—		99		—
	W	881		—		105,180		108,572
Entity that has significant influence over the Controlling Company
LG Electronics Inc.	W	67,629		94,193		105,918		88,629
Subsidiaries of the entity that has significant influence over the Controlling Company
LG Electronics Vietnam Haiphong Co., Ltd.		52,327		36,417		252		16
LG Electronics Nanjing New Technology Co., Ltd.		102,691		88,075		155		83
LG Electronics RUS, LLC		13,276		10,295		—		—
LG Electronics do Brasil Ltda.		5,910		7,481		—		14
LG Innotek Co., Ltd.		767		227		40,135		31,309
HI-M Solutek Co., Ltd		—		—		2,397		582
LG Electronics Mexicali, S.A. DE C.V.		17,795		20,969		—		15

111

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

29. Related Parties and Others, Continued

(In millions of won)
	Trade accounts and notes receivable and others				Trade accounts and notes payable and others
	December 31, 2021		December 31, 2020		December 31, 2021		December 31, 2020
LG Electronics Mlawa Sp. z o.o.	W	218,206		89,481		22		10
LG Electronics Reynosa, S.A. DE C.V.		177,298		70,555		10		50
LG Electronics Egypt S.A.E.		19,489		13,359		—		—
P.T. LG Electronics Indonesia		73,732		48,677		32		—
LG Electronics India Pvt. Ltd.		7,319		3,697		111		—
LG Electronics Japan, Inc.		—		—		471		466
LG Electronics Taiwan Taipei Co., Ltd.		2,046		337		53		35
LG Electronics Nanjing Vehicle Components Co., Ltd.		143		457		—		—
LG Technology Ventures LLC		—		—		33		11
Others		24		10		1,491		968
	W	691,023		390,037		45,162		33,559
	W	759,533		484,230		256,260		230,760

112

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

29. Related Parties and Others, Continued

(d) Details of significant financing transactions such as granting and collecting loans, which occurred in the normal course of business with related parties for the year ended December 31, 2021 are as follows:

(In millions of won)
	2021
Associates	Loans		Collection of loans
WooRee E&L Co., Ltd.	W	878		—

There were no significant financing transactions with related parties for the year ended December 31, 2020.

113

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

29. Related Parties and Others, Continued

(e) Conglomerate Transactions

Transactions, trade accounts and notes receivable and payable, and others between the Group and certain companies and their subsidiaries included in LG Group, one of the conglomerates in the Republic of Korea according to the Monopoly Regulation and Fair Trade Act as of and for the years ended December 31, 2021 and 2020 are as follows. These entities are not related parties according to K-IFRS No. 1024, Related Party Disclosures.

(In millions of won)
	For the year ended December 31, 2021				December 31, 2021
	Sales and others		Purchase and others		Trade accounts and notes receivable and others		Trade accounts and notes payable and others
LX International Corp. and its subsidiaries (formerly, LG International Corp.)(*1)	W	570,716		287,203		48,955		41,355
LG Uplus Corp.		—		2,355		—		163
LG Chem Ltd. and its subsidiaries		172		634,886		2,974		111,761
S&I Corp. and its subsidiaries		313		409,845		5,862		171,870
LX Semicon Co., Ltd. (formerly, Silicon Works Co., Ltd)(*2)		2,551		1,356,864		117		112,572
LG Corp.		—		68,420		6,754		11,193
LG Management Development Institute		—		21,069		3,480		205
LG CNS Co., Ltd. and its subsidiaries		118		329,724		100		186,784
LG Household & Health Care Ltd. and its subsidiaries		—		335		—		55
LG Holdings Japan Co., Ltd.		—		512		—		—
G2R Inc. and its subsidiaries		—		23,521		—		11,933
Robostar Co., Ltd.		—		7,600		—		2,006
	W	573,870		3,142,334		68,242		649,897

(*1) LG International Corp. renamed its name as LX International Corp. on July 1, 2021.

(*2) Silicon Work Co., Ltd. renamed its name as LX Semicon Co., Ltd. on July 1, 2021.

114

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

29. Related Parties and Others, Continued

(In millions of won)
	For the year ended December 31, 2020				December 31, 2020
	Sales and others		Purchase and others		Trade accounts and notes receivable and others		Trade accounts and notes payable and others
LG International Corp. and its subsidiaries	W	376,898		260,736		81,353		28,583
LG Uplus Corp.		—		2,127		—		151
LG Chem Ltd. and its subsidiaries		1,286		861,285		115		179,944
S&I Corp. and its subsidiaries		324		261,710		5,864		103,896
Silicon Works Co., Ltd.		36		865,727		—		136,715
LG Corp.		—		57,200		6,799		1,417
LG Management Development Institute		—		8,294		3,480		351
LG CNS Co., Ltd. and its subsidiaries		254		202,222		253		93,477
LG Household & Health Care Ltd. and its subsidiaries		—		247		—		—
LG Holdings Japan Co., Ltd.		—		2,154		2,244		—
G2R Inc. and its subsidiaries		—		39,013		—		8,851
Robostar Co., Ltd.		—		1,769		—		1,033
	W	378,798		2,562,484		100,108		554,418

115

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

29. Related Parties and Others, Continued

(f) Key management personnel compensation

Compensation costs of key management for the years ended December 31, 2021 and 2020 are as follows:

(In millions of won)
	2021		2020
Short-term benefits	W	3,747		2,233
Expenses related to the defined benefit plan		366		346
	W	4,113		2,579

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

30. Supplemental Cash Flow Information

Supplemental cash flow information for the years ended December 31, 2021 and 2020 is as follows:

(In millions of won)
	2021		2020
Non-cash investing and financing activities:
Changes in other accounts payable arising from the purchase of property, plant and equipment		W445,028		(662,164	)
Changes in other accounts payable arising from the purchase of intangible assets		529,826		98,068
Recognition of right-of-use assets and lease liabilities		63,655		51,757

116

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: March 8, 2022	By:    /s/ Suk Heo
		(Signature)
	Name: Suk Heo
	Title:   Director/Head of IR Division