British American Tobacco p.l.c. – Annual report – 31 December 2024
Industry: tobacco
1 Accounting policies (extract)
Basis of preparation (extract)
With effect from 1 January 2024, the Group has adopted the Amendments to IAS 7 Cash Flow Statements and IFRS 7 Financial Instruments: Disclosures in respect of disclosures relating to Supplier Financing Arrangements. Applying these amendments impacted certain disclosures in the notes to the financial statements. In addition, Amendments to IAS 1 Presentation of Financial Statements have clarified certain aspects of the classification of liabilities as current or non-current. The impact of these amendments was not material.
25 Trade and other payables
Supplier Financing Arrangements
The Group has certain supplier financing arrangements or ‘reverse factoring’ arrangements in place. The principal purpose of these arrangements is to provide the supplier with the option to access liquidity earlier through the sale of its receivables due from the Group to a bank or other financial institution prior to their due date. Management has determined that the Group’s payables to these suppliers have neither been extinguished nor have the liabilities been significantly modified by these arrangements. The value of amounts payable, invoice due dates and other terms and conditions applicable, from the Group’s perspective, remain unaltered, with only the ultimate payee being changed. Non-cash movements were immaterial. The cash outflows in respect of these arrangements have been recognised within operating cash flows.
Note:
Suppliers are subject to various payment due dates depending on the jurisdiction and standard practices. The Group’s payment terms commence from the invoice date. However, for certain categories of external suppliers and in alignment with industry standards, payment terms begin from the date a valid invoice is received.
* The Group applied transitional relief available under Supplier Finance Arrangements – Amendments to IAS 7 and IFRS 7 and has not provided comparative information in the first year of adoption.
Note 1: Leaf suppliers are subject to various payment due dates depending on the jurisdiction and standard practices. In certain countries, the leaf suppliers who are not part of supplier financing arrangements are paid in advance or on the next working day. In 2023, the standard payment due date for the leaf supplier utilising supplier financing arrangements was 150 days.
26 Financial instruments and risk management (extract)
Liquidity risk (extract)
As part of its working capital management, in certain countries, the Group has entered into factoring arrangements and supply chain financing arrangements. These are explained in further detail in note 17 and note 25.
Accounts examples 