LG Display (LPL) 6-K Current report (foreign)

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 Separate Financial Statements		Unqualified		Unqualified

4. Financial Highlights of Separate Financial Statements

(KRW)
Items	FY 2021			FY 2020
Total Assets		29,478,122,181,062			26,705,202,140,567
Total Liabilities		18,835,302,978,985			16,441,966,765,904
Total Shareholders’ Equity		10,642,819,202,077			10,263,235,374,663
Capital Stock		1,789,078,500,000			1,789,078,500,000
Revenues		28,364,913,893,778			22,799,272,740,610
Operating Income		721,930,518,551			-812,979,310,716
Ordinary Income		393,198,636,221			-1,202,769,369,862
Net Income		552,173,088,265			-513,262,046,420
Total Shareholders’ Equity / Capital Stock		595	%		574	%

LG DISPLAY CO., LTD.

Separate Financial Statements

For the Years Ended December 31, 2021 and 2020

(With Independent Auditors’ Report Thereon)

Contents

	Page
Independent Auditors’ Report		1
Separate Statements of Financial Position		5
Separate Statements of Comprehensive Income (Loss)		6
Separate Statements of Changes in Equity		7
Separate Statements of Cash Flows		8
Notes to the Separate Financial Statements		10
Independent Auditors’ Report on Internal Control over Financial Reporting		97
Report on the Operation of Internal Control over Financial Reporting		99

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

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

We also have audited, in accordance with the Standards on Auditing, the Company’s Internal Control over Financial Reporting as of December 31, 2021, based on criteria established in Conceptual Framework for Designing and Operating Internal Control over Financial Reporting issued by the Operating Committee of Internal Control over Financial Reporting in Korea, and our report dated March 8, 2022 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

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 Separate Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the separate 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.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the separate financial statements as of and for the year ended December 31, 2021. These matters were addressed in the context of our audit of the separate 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 separate financial statements, goodwill ofW14,593 million is allocated to the Company’s Display CGU. The Company’s non-financial assets as of December 31, 2021 amount toW13,470,670 million, and a large portion of which are related to the Display CGU. The recoverable amount used by the Company 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 Company 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 Company’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 Company’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 Company’s historical revenue and operating expenditures forecasts to actual results to assess the Company’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 Company’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 separate 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 Company. As of December 31, 2021, the Company hadW2,238,410 million of deferred tax assets in the separate statement of financial position andW182,617 million of unrecognized tax credit carryforwards as of December 31, 2021.

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 Company’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 Company’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 Company’s estimates of taxable income, including analyzing the Company’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 Company’s ability to accurately forecast.

• We also evaluated the Company’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 separate financial statements may differ from those generally accepted and applied in other countries.

2

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

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

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

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

Auditors’ Responsibilities for the Audit of the Separate Financial Statements

Our objectives are to obtain reasonable assurance about whether theses separate 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 separate 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 separate financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’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 separate 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 Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the separate financial statements, including the disclosures, and whether the separate financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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 separate 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 separate 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.

Separate 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	950,847			1,220,098
Deposits in banks		4, 26		76,913			76,852
Trade accounts and notes receivable, net		5, 14, 26, 29		5,051,836			3,797,248
Other accounts receivable, net		5, 26		79,939			141,332
Other current financial assets		6, 26		37,764			43,151
Inventories		7		2,130,997			1,418,122
Prepaid income tax		24		57,722			110,388
Other current assets				180,638			140,863
Total current assets				8,566,656			6,948,054
Deposits in banks		4, 26		11			11
Investments		8		4,942,729			4,784,828
Other non-current accounts receivable, net		5, 26		5,122			5,797
Other non-current financial assets		6, 26		87,469			29,133
Property, plant and equipment, net		9, 27		12,010,858			11,736,673
Intangible assets, net		10		1,459,812			887,431
Deferred tax assets		24		2,238,410			1,971,787
Defined benefits assets		12		68,276			224,997
Other non-current assets				98,779			116,491
Total non-current assets				20,911,466			19,757,148
Total assets			W	29,478,122			26,705,202
Liabilities
Trade accounts and notes payable		26, 29	W	6,528,451			4,591,319
Current financial liabilities		11, 26, 27		2,557,696			2,162,989
Other accounts payable		26		2,800,823			2,373,730
Accrued expenses				1,012,009			499,610
Provisions		13		171,865			196,107
Advances received				30,060			312,790
Other current liabilities				48,065			44,115
Total current liabilities				13,148,969			10,180,660
Non-current financial liabilities		11, 26, 27		5,038,155			6,072,225
Non-current provisions		13		92,942			89,633
Other non-current liabilities		26		555,238			99,449
Total non-current liabilities				5,686,335			6,261,307
Total liabilities				18,835,304			16,441,967
Equity
Share capital		15		1,789,079			1,789,079
Share premium		15		2,251,113			2,251,113
Retained earnings		16		6,611,853			6,223,043
Reserves		16		(9,227	)		—
Total equity				10,642,818			10,263,235
Total liabilities and equity			W	29,478,122			26,705,202

See accompanying notes to the separate financial statements.

5

LG DISPLAY CO., LTD.

Separate Statements of Comprehensive Income (Loss)

For the years ended December 31, 2021 and 2020

(In millions of won, except earnings per share)	Note		2021			2020
Revenue		17, 29	W	28,364,914			22,799,273
Cost of sales		7, 18, 29		(25,346,568	)		(21,566,984	)
Gross profit				3,018,346			1,232,289
Selling expenses		18, 19		(502,412	)		(517,023	)
Administrative expenses		18, 19		(590,826	)		(447,738	)
Research and development expenses		18		(1,203,177	)		(1,080,507	)
Operating profit(loss)				721,931			(812,979	)
Finance income		22		291,665			304,344
Finance costs		22		(629,216	)		(519,501	)
Other non-operating income		21		889,413			1,265,604
Other non-operating expenses		18, 21		(880,594	)		(1,440,237	)
Profit (loss) before income tax				393,199			(1,202,769	)
Income tax benefit		23		(158,974	)		(689,507	)
Profit (loss) for the year				552,173			(513,262	)
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
Items that will be reclassified to profit or loss
Loss on valuation of derivative		23, 26		(9,227	)		—
Other comprehensive income (loss) for the year, net of income tax				(172,590	)		110,404
Total comprehensive income(loss) for the year			W	379,583			(402,858	)
Earnings (loss) per share (in won)
Basic earnings (loss) per share		25	W	1,543			(1,434	)
Diluted earnings (loss) per share		25	W	1,540			(1,434	)

See accompanying notes to the separate financial statements.

6

LG DISPLAY CO., LTD.

Separate Statements of Changes in Equity

For the years ended December 31, 2021 and 2020

(In millions of won)	Share capital		Share premium		Retained earnings			Other capital			Total equity
Balances at January 1, 2020	W	1,789,079		2,251,113		6,625,901			—			10,666,093
Total comprehensive loss for the period
Loss for the year		—		—		(513,262	)		—			(513,262	)
Other comprehensive income
Remeasurements of net defined benefit liabilities, net of tax		—		—		110,404			—			110,404
Total comprehensive loss for the period	W	—		—		(402,858	)		—			(402,858	)
Balances at December 31, 2020	W	1,789,079		2,251,113		6,223,043			—			10,263,235
Balances at January 1, 2021	W	1,789,079		2,251,113		6,223,043			—			10,263,235
Total comprehensive lncome for the period
Profit for the year		—		—		552,173			—			552,173
Other comprehensive loss
Remeasurements of net defined benefit liabilities, net of tax		—		—		(163,363	)		—			(163,363	)
Loss on valuation of derivative		—		—		—			(9,227	)		(9,227	)
Total other comprehensive loss		—		—		(163,363	)		(9,227	)		(172,590	)
Total comprehensive income (loss) for the period	W	—		—		388,810			(9,227	)		379,583
Balances at December 31, 2021	W	1,789,079		2,251,113		6,611,853			(9,227	)		10,642,818

See accompanying notes to the separate financial statements.

7

LG DISPLAY CO., LTD.

Separate 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	552,173			(513,262	)
Adjustments for:
Income tax benefit		23		(158,974	)		(689,507	)
Depreciation and amortization		9, 10, 18		2,532,888			2,519,199
Gain on foreign currency translation				(43,404	)		(234,185	)
Loss on foreign currency translation				157,164			175,434
Expenses related to defined benefit plans		12, 20		142,535			158,793
Gain on disposal of property, plant and equipment				(24,647	)		(43,155	)
Loss on disposal of property, plant and equipment				49,871			58,852
Impairment loss on property, plant and equipment				10,662			11,482
Gain on disposal of intangible assets				(196	)		—
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				183,193			276,670
Finance income				(272,698	)		(277,087	)
Finance costs				617,681			458,358
Other income				—			(11,000	)
Other expenses				15,348			—
				3,237,759			2,482,705
Changes in
Trade accounts and notes receivable				(1,239,010	)		(756,684	)
Other accounts receivable				65,970			38,701
Inventories				(712,875	)		108,177
Other current assets				13,070			56,883
Other non-current assets				(61,737	)		(57,421	)
Trade accounts and notes payable				1,861,287			2,101,690
Other accounts payable				(25,962	)		(1,152,368	)
Accrued expenses				524,061			(12,299	)
Provisions				(204,126	)		(246,285	)
Advances received				(284,031	)		(410,811	)
Other current liabilities				(12,186	)		(3,958	)
Defined benefit liabilities, net				(206,615	)		(108,102	)
Other non-current liabilities				10,860			12,535
				(271,294	)		(429,942	)
Cash generated from operating activities				3,518,638			1,539,501
Income taxes refunded				5,725			48,143
Interests received				2,495			9,364
Interests paid				(229,827	)		(285,194	)
Net cash provided by operating activities			W	3,297,031			1,311,814

See accompanying notes to the separate financial statements.

8

LG DISPLAY CO., LTD.

Separate 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				(76,913	)		(76,852	)
Proceeds from withdrawal of deposits in banks				76,852			77,257
Acquisition of financial asset at fair value through profit or loss				—			(200	)
Proceeds from disposal of financial assets at fair value through other comprehensive income				24			6
Acquisition of investments				(154,665	)		(7,241	)
Proceeds from disposal of investments				4,363			194,553
Acquisition of property, plant and equipment				(2,003,923	)		(1,249,208	)
Proceeds from disposal of property, plant and equipment				65,744			450,239
Acquisition of intangible assets				(600,355	)		(331,423	)
Proceeds from disposal of intangible assets				2,946			16,705
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				(825	)		(566	)
Decrease in deposits				1,687			1,286
Proceeds from disposal of other assets				—			11,000
Net cash used in investing activities				(2,684,593	)		(868,017	)
Cash flows from financing activities:		28
Proceeds from short-term borrowings				900,460			1,075,095
Repayments of short-term borrowings				(1,256,440	)		(1,070,356	)
Proceeds from issuance of bonds				498,027			49,949
Proceeds from long-term borrowings				1,298,346			741,166
Repayments of current portion of long-term borrowings and bonds				(2,314,432	)		(1,119,579	)
Payment guarantee fee received				5,009			7,154
Repayments of lease liabilities				(12,659	)		(12,373	)
Net cash used in financing activities				(881,689	)		(328,944	)
Net increase (decrease) in cash and cash equivalents				(269,251	)		114,853
Cash and cash equivalents at January 1				1,220,098			1,105,245
Cash and cash equivalents at December 31			W	950,847			1,220,098

See accompanying notes to the separate interim financial statements.

9

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2021 and 2020

1. Organization and Description of Business

LG Display Co., Ltd. (the “Company”) was incorporated in February 1985 and the Company is a public corporation listed in the Korea Exchange since 2004. The main business of the Company is to manufacture and sell displays and its related products. As of December 31, 2021, the Company 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 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 Company, owns 37.9% (135,625,000 shares) of the Company’s common stock.

The 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 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.

2. Basis of Presenting Financial Statements

(a) Statement of Compliance

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

These financial statements are separate financial statements prepared in accordance with K-IFRS No.1027, Separate Financial Statements, presented by a parent, an investor in an associate or a venture in a joint ventures, in which the investments are accounted for on the basis of the direct equity interest rather than on the basis of the reported results and net assets of the investees.

The separate 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 separate financial statements have been prepared on the historical cost basis except for the following material items in the separate 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

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LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2021 and 2020

2. Basis of Presenting Financial Statements, Continued

(c) Functional and Presentation Currency

The separate financial statements are presented in Korean won, which is the Company’s functional currency.

(d) Use of Estimates and Judgments

The preparation of the separate 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 separate 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 (Note3(r), 24)

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 Company in the preparation of its separate financial statements are as follows:

(a) Changes in Accounting Policies

The Company 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 Company’s separate financial statements.

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LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2021 and 2020

3. Summary of Significant Accounting Policies, Continued

(a) Changes in Accounting Policies, Continued

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 Company 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 separate financial statements. There is no impact on the Company’s separate financial statements as a result of the retrospective application of the amendments. 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.

(b) Interest in subsidiaries, associates and joint ventures

These separate financial statements are prepared and presented in accordance with K-IFRS No.1027, Separate Financial Statements. The Company applied the cost method to investments in subsidiaries, associates and joint ventures. Dividends from subsidiaries, associates or joint ventures are recognized in profit or loss when the right to receive the dividend is established.

(c) Foreign Currency Transaction and Translation

Transactions in foreign currencies are translated to the functional currency of the Company 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 separate 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 separate statement of comprehensive income (loss). Foreign currency differences are presented in gross amounts in the separate statement of comprehensive income (loss).

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LG DISPLAY CO., LTD.

Notes to the Separate 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 Company 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 Company 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.

Notes to the Separate 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 Company 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 Company 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 Company 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 Company’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.

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.

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LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2021 and 2020

3. Summary of Significant Accounting Policies, Continued

(f) Financial Instruments, Continued

In assessing whether the contractual cash flows are solely payments of principal and interest, the Company 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 Company 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 Company’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.

Derecognition

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

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LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2021 and 2020

3. Summary of Significant Accounting Policies, Continued

(f) Financial Instruments, Continued

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 Company 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 Company 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 Company 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 separate statement of financial position when, and only when, the Company 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 Company 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 separate statement of financial position when the Company 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.

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

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LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2021 and 2020

3. Summary of Significant Accounting Policies, Continued

(f) Financial Instruments, Continued

(iii) Share Capital

The Company 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 Company 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 Company’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 Company 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.

Notes to the Separate 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 Company 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 Company 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.

Notes to the Separate 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 Company 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 Company. 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 Company 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 Company 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 Company borrows funds specifically for the purpose of obtaining a qualifying asset, the Company 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 Company immediately recognizes other borrowing costs as an expense.

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LG DISPLAY CO., LTD.

Notes to the Separate 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 Company 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 Company’s expenses incurred

A government grant that compensates the Company 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 Company 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.

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LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2021 and 2020

3. Summary of Significant Accounting Policies, Continued

(j) Intangible Assets, Continued

(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 Company can demonstrate all of the following:

• 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 Company 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.

Notes to the Separate 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 separate 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 Company recognizes loss allowance for financial assets measured at amortized cost and debt investments at FVOCI at the ‘expected credit loss’ (ECL).

The Company 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 Company 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 Company’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.

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LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2021 and 2020

3. Summary of Significant Accounting Policies, Continued

(k) Impairment, Continued

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

The maximum period considered when estimating ECLs is the maximum contractual period over which the Company 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 Company 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 separate 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 separate statement of financial position.

Write-off

The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations for recovering the financial asset in its entirety or a portion thereof. The Company 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 Company 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 Company’s procedures for recovery of amounts due.

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LG DISPLAY CO., LTD.

Notes to the Separate 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 Company’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 Company 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 Company 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.

Notes to the Separate 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 Company 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 Company 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 Company 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 Company by the end of the lease term or the cost of the right-of-use asset reflects that the Company 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 Company’s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.

The Company 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.

25

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2021 and 2020

3. Summary of Significant Accounting Policies, Continued

(l) Lease, Continued

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

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 Company’s estimate of the amount expected to be payable under a residual value guarantee, if the Company 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 Company 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 Company recognizes any remaining amount of the remeasurement in profit or loss.

The Company presents right-of-use assets in ‘property, plant and equipment’ and lease liabilities in ‘financial liabilities’ in the separate statement of financial position.

The Company has elected not to recognize right-of-use assets and lease liabilities for leases of low-value assets and short-term leases. The Company 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 Company 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 Company 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 Company considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

When the Company 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 Company applies the exemption described above, then it classifies the sub-lease as an operating lease.

26

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2021 and 2020

3. Summary of Significant Accounting Policies, Continued

(l) Lease, Continued

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

At the commencement date, the Company 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 Company recognizes lease payments received under operating leases as income on a straight-line basis over the lease term as part of ‘other revenue’.

(m) Provisions

A provision is recognized, as a result of a past event, if the Company 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 Company 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 Company’s warranty liability include historical and anticipated rates of warranty claims on those repairs and cost per claim to satisfy the Company’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.

27

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2021 and 2020

3. Summary of Significant Accounting Policies, Continued

(n) 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 Company 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 Company’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 Company’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 Company’s obligations and that are denominated in the same currency in which the benefits are expected to be paid. The Company recognizes all actuarial gains and losses arising from defined benefit plans in retained earnings immediately.

The Company 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 Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

28

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2021 and 2020

3. Summary of Significant Accounting Policies, Continued

(n) Employee Benefits, Continued

(v) Termination benefits

The Company 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 Company measures the termination benefit with present value of future cash payments.

(o) 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 Company recognizes revenue according to the five-stage revenue recognition model (① Identifying the contractg ② Identifying performance obligationsg③ Determining transaction priceg ④ Allocating the transaction price to performance obligationsg⑤ Recognizing revenue for performance obligations).

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

The Company 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 Company estimates an amount of variable consideration by using the expected value method which the Company expects to better predict the amount of consideration. The Company 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 Company recognizes a refund liability and an asset for its right to recover products from customers if the Company 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 separate statement of comprehensive income (loss).

(p) Operating Segments

In accordance with K-IFRS No. 1108, Operating Segments, entity wide disclosures of geographic and product revenue information are provided in the separate financial statements.

(q) 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 Company’s right to receive payment is established.

29

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2021 and 2020

3. Summary of Significant Accounting Policies, Continued

(q) Finance Income and Finance Costs, Continued

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.

(r) 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 Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

The Company 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 Company 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 Company offsets deferred tax assets and deferred tax liabilities if, and only if, the Company 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.

30

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2021 and 2020

3. Summary of Significant Accounting Policies, Continued

(s) Earnings (Loss) Per Share

The 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 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.

(t) Business Combinations

The Company accounts for business combinations using the acquisition method when control is transferred to the Company. The consideration transferred in the acquisition and the identifiable net assets acquired from business combinations are measured at fair value. If the consideration transferred exceeds the fair value of identifiable net asset, the Company recognizes goodwill; if not, then the Company 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.

(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 Company has not early adopted the amended standards in preparing these separate 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.

31

LG DISPLAY CO., LTD.

Notes to the Separate 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 company’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 Company 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 Company is 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 Company expects to recognize separate deferred tax assets and liabilities for right of use assets and lease liabilities and it will be applied retrospectively.

(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.

32

LG DISPLAY CO., LTD.

Notes to the Separate 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

(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 Company does not expect that such amendments have a material effect on the Company’s separate 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 Company is currently assessing the impacts of the application of above amended standards on the Company’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 separate financial statements of the Company, except for the Amendments to K-IFRS No. 1001, Presentation of Financial Statements.

33

LG DISPLAY CO., LTD.

Notes to the Separate 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
Demand deposits	W	950,847		1,220,098
Deposits in banks
Restricted deposits (*)	W	76,913		76,852
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 Company’s investment plans upon the receipt of grants from Gumi city and Gyeongsangbuk-do, and others.

5. Trade Accounts and Notes Receivable and Other Accounts Receivable

(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	203,963		201,640
Due from related parties		4,847,873		3,595,608
	W	5,051,836		3,797,248

(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	77,147		130,217
Accrued income		2,792		11,115
	W	79,939		141,332
Non-current assets
Long-term non-trade receivables	W	5,122		5,797
	W	85,061		147,129

Due from related parties included in other accounts receivable, as of December 31, 2021 and 2020 areW24,618 million andW59,620 million, respectively.

34

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2021 and 2020

5. Trade Accounts and Notes Receivable and Other Accounts Receivable, 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	5,051,778		85,154		(11	)		(1,423	)
1-15 days past due		6		822		—			(6	)
16-30 days past due		—		44		—			—
31-60 days past due		61		16		—			—
More than 60 days past due		2		521		—			(67	)
	W	5,051,847		86,557		(11	)		(1,496	)

(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	3,796,830		146,153		(27	)		(1,466	)
1-15 days past due		415		919		—			(7	)
16-30 days past due		30		521		—			—
31-60 days past due		—		782		—			(8	)
More than 60 days past due		—		257		—			(22	)
	W	3,797,275		148,632		(27	)		(1,503	)

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	27			1,503			5		2,978
(Reversal of) bad debt expense		(16	)		(7	)		22		(411	)
Write-off		—			—			—		(1,064	)
Balance at the end of the year	W	11			1,496			27		1,503

35

LG DISPLAY CO., LTD.

Notes to the Separate 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 bonds	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
Short-term loans	W	22,518		28,491
Deposits		—		5,384
	W	22,518		33,875
	W	37,764		43,151
Non-current assets
Financial assets at fair value through profit or loss
Equity instruments	W	3,096		1,381
Convertible bonds		—		1,289
Derivatives(*1)		52,871		111
	W	55,967		2,781
Financial assets at fair value through other comprehensive income
Debt instruments
Government bonds	W	21		48
Financial assets carried at amortized cost
Deposits	W	11,542		12,405
Long-term loans		19,939		13,899
	W	31,481		26,304
	W	87,469		29,133

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

36

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2021 and 2020

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

37

LG DISPLAY CO., LTD.

Notes to the Separate 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	450,520		372,864
Work-in-process		943,586		539,747
Raw materials		641,047		411,165
Supplies		95,844		94,346
	W	2,130,997		1,418,122

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	25,346,568			21,566,984
Inventory write-downs		169,870			178,155
Usage of inventory write-downs		(178,155	)		(408,567	)

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

38

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2021 and 2020

8. Investments

(a) Investments in subsidiaries consist of the following:

(In millions of won)
					December 31, 2021					December 31, 2020
Subsidiaries	Location		Business		Percentage of ownership			Book Value		Percentage of ownership			Book Value
LG Display America, Inc.		San Jose, U.S.A.		Sell display products		100	%	W	36,815		100	%	W	36,815
LG Display Germany GmbH		Eschborn, Germany		Sell display products		100	%		19,373		100	%		19,373
LG Display Japan Co., Ltd.		Tokyo, Japan		Sell display products		100	%		15,686		100	%		15,686
LG Display Taiwan Co., Ltd.		Taipei, Taiwan		Sell display products		100	%		35,230		100	%		35,230
LG Display Nanjing Co., Ltd.		Nanjing, China		Manufacture display products		100	%		593,726		100	%		593,726
LG Display Shanghai Co., Ltd.		Shanghai, China		Sell display products		100	%		9,093		100	%		9,093
LG Display Guangzhou Co., Ltd.		Guangzhou, China		Manufacture display products		100	%		293,557		100	%		293,557
LG Display Shenzhen Co., Ltd.		Shenzhen, China		Sell display products		100	%		3,467		100	%		3,467
LG Display Singapore Pte. Ltd.		Singapore		Sell display products		100	%		1,250		100	%		1,250
L&T Display Technology (Fujian) Limited		Fujian, China		Manufacture and sell LCD module and LCD monitor sets		51	%		10,123		51	%		10,123
LG Display Yantai Co., Ltd.		Yantai, China		Manufacture display products		100	%		169,195		100	%		169,195
Nanumnuri Co., Ltd.		Gumi, South Korea		Provide janitorial services		100	%		800		100	%		800
LG Display (China) Co., Ltd.		Guangzhou,China		Manufacture and sell display products		51	%		723,086		51	%		723,086
Unified Innovative Technology, LLC		Wilmington, U.S.A.		Manage intellectual property		100	%		9,489		100	%		9,489
LG Display Guangzhou Trading Co., Ltd.		Guangzhou, China		Sell display products		100	%		218		100	%		218
Global OLED Technology LLC		Sterling, U.S.A		Manage OLED intellectual property		100	%		164,322		100	%		164,322
LG Display Vietnam Haiphong Co., Ltd.		Haiphong, Vietnam		Manufacture display products		100	%		672,658		100	%		672,658
Suzhou Lehui Display Co., Ltd.		Suzhou, China		Manufacture and sell LCD module and LCD monitor sets		100	%		121,640		100	%		121,640
LG DISPLAY FUND I LLC(*)		Wilmington, U.S.A		Invest in venture business and acquire technologies		100	%		52,129		100	%		13,564
LG Display High-Tech (China) Co., Ltd.		Guangzhou, China		Manufacture and sell display products		69	%		1,794,547		69	%		1,794,547
Money Market Trust		Seoul, South Korea		Money market trust		100	%		127,400		100	%		11,300
								W	4,853,804				W	4,699,139

(*) During 2021, the Company contributedW38,565 million in cash for the capital increase of LG DISPLAY FUND I LLC. There was no change in the Company’s ownership percentage in LG DISPLAY FUND I LLC as a result of this additional investment.

39

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2021 and 2020

8. Investments, Continued

(b) Investments in associates consist of the following:

(In millions of won)
			December 31, 2021				December 31, 2020
Associates	Location	Business	Percentage of ownership			Carrying amount	Percentage of ownership			Carrying amount
Paju Electric Glass Co., Ltd.	Paju, South Korea	Manufacture glass for display		40	%	W45,089		40	%	W45,089
WooRee E&L Co., Ltd.(*1)	Ansan, South Korea	Manufacture LED back light unit packages		13	%	11,424		14	%	10,540
YAS Co., Ltd.	Paju, South Korea	Develop and manufacture deposition equipment for OLEDs		15	%	10,000		15	%	10,000
AVATEC Co., Ltd.	Daegu, South Korea	Process and sell glass for display		15	%	8,000		14	%	8,000
Arctic Sentinel, Inc.	Los Angeles, U.S.A.	Develop and manufacture tablet for kids		10	%	—		10	%	—
Cynora GmbH(*2)	Bruchsal Germany	Develop organic emitting materials for displays and lighting devices		11	%	—		12	%	2,609
Material Science Co., Ltd.(*3)	Seoul, South Korea	Develop, manufacture and sell materials for display		10	%	3,680		10	%	3,791
Nanosys Inc.(*4)	Milpitas, U.S.A.	Develop, manufacture and sell materials for display		4	%	10,732		3	%	5,660
						W88,925				W85,689

(*1) During 2021, the Company recognized a reversal of impairment loss ofW884 million as finance income for the difference between the carrying amount and the recoverable amount of investments in WooRee E&L Co., Ltd.

(*2) During 2021, the Company recognized an impairment loss ofW2,609 million as finance cost for the investments in Cynora GmbH.

(*3) During 2021, the Company recognized an impairment loss ofW111 million as finance cost for the investments in Material Science Co., Ltd.

(*4) During 2021, the Company recognized a reversal of impairment loss ofW5,072 million as finance income for the difference between the carrying amount and the recoverable amount of investments in Nanosys Inc.

Dividends income recognized from subsidiaries and associates for the years ended December 31, 2021 and 2020 amounted toW8,318 million andW8,239 million, respectively.

40

LG DISPLAY CO., LTD.

Notes to the Separate 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			4,816,013			36,778,107			492,022			5,096,488			27,680			762,013			48,415,145
Accumulated depreciation as of January 1, 2021		—			(2,775,252	)		(31,787,378	)		(416,215	)		—			(22,001	)		(515,671	)		(35,516,517	)
Accumulated impairment loss as of January 1, 2021		—			(66,993	)		(990,421	)		(5,028	)		(76,637	)		(247	)		(22,629	)		(1,161,955	)
Book value as of January 1, 2021	W	442,822			1,973,768			4,000,308			70,779			5,019,851			5,432			223,713			11,736,673
Additions		—			—			—			—			2,429,895			12,500			—			2,442,395
Depreciation		—			(215,289	)		(1,601,926	)		(38,671	)		—			(12,642	)		(191,069	)		(2,059,597	)
Disposals		(8,975	)		(17,655	)		(23,527	)		(9	)		(6,898	)		—			(40,448	)		(97,512	)
Impairment loss		—			(79	)		(4,040	)		(3	)		620			—			(7,160	)		(10,662	)
Others(*2)		—			197,779			377,210			73,488			(886,705	)		—			237,789			(439	)
Book value as of December 31, 2021	W	433,847			1,938,524			2,748,025			105,584			6,556,763			5,290			222,825			12,010,858
Acquisition cost as of December 31, 2021	W	433,847			5,150,686			36,476,141			546,221			6,632,832			32,999			842,082			50,114,808
Accumulated depreciation as of December 31, 2021	W	—			(3,073,483	)		(32,813,259	)		(435,666	)		—			(27,542	)		(599,171	)		(36,949,121	)
Accumulated impairment loss as of December 31, 2021	W	—			(138,679	)		(914,857	)		(4,971	)		(76,069	)		(167	)		(20,086	)		(1,154,829	)

(*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.

41

LG DISPLAY CO., LTD.

Notes to the Separate 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			4,839,806			36,694,704			668,956			4,491,455			19,078			632,773			47,800,807
Accumulated depreciation as of January 1, 2020		—			(2,596,845	)		(30,263,872	)		(601,071	)		—			(12,354	)		(400,341	)		(33,874,483	)
Accumulated impairment loss as of January 1, 2020		—			(68,091	)		(986,297	)		(5,037	)		(75,474	)		(309	)		(26,941	)		(1,162,149	)
Book value as of January 1, 2020	W	454,035			2,174,870			5,444,535			62,848			4,415,981			6,415			205,491			12,764,175
Additions		—			—			—			—			1,319,984			11,193			—			1,331,177
Depreciation		—			(205,736	)		(1,708,850	)		(32,711	)		—			(12,176	)		(187,148	)		(2,146,621	)
Disposals		(11,266	)		(32,519	)		(104,997	)		(3,024	)		—			—			(48,770	)		(200,576	)
Impairment loss		—			1,074			(4,203	)		8			(3,424	)		—			(4,937	)		(11,482	)
Others(*2)		53			36,079			373,823			43,658			(712,690	)		—			259,077			—
Book value as of December 31, 2020	W	442,822			1,973,768			4,000,308			70,779			5,019,851			5,432			223,713			11,736,673
Acquisition cost as of December 31, 2020	W	442,822			4,816,013			36,778,107			492,022			5,096,488			27,680			762,013			48,415,145
Accumulated depreciation as of December 31, 2020	W	—			(2,775,252	)		(31,787,378	)		(416,215	)		—			(22,001	)		(515,671	)		(35,516,517	)
Accumulated impairment loss as of December 31, 2020	W	—			(66,993	)		(990,421	)		(5,028	)		(76,637	)		(247	)		(22,629	)		(1,161,955	)

(*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	34,318			77,087
Capitalization rate		2.69	%		2.85	%

42

LG DISPLAY CO., LTD.

Notes to the Separate 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	979,514			1,041,468			38,915			2,865,264			10,117			59,176			11,074			72,588			13,082			5,091,198
Accumulated amortization as of January 1, 2021		(577,290	)		(882,407	)		—			(2,352,680	)		—			(37,491	)		(11,074	)		—			(13,082	)		(3,874,024	)
Accumulated impairment loss as of January 1, 2021		(21,573	)		(8,408	)		(9,451	)		(210,631	)		—			(21,685	)		—			(57,995	)		—			(329,743	)
Book value as of January 1, 2021	W	380,651			150,653			29,464			301,953			10,117			—			—			14,593			—			887,431
Additions - internally developed		—			—			—			362,897			—			—			—			—			—			362,897
Additions - external purchases		613,963			17,380			742			—			95,435			—			1,689			—			—			729,209
Amortization (*1)		(161,000	)		(81,231	)		—			(230,891	)		—			—			(169	)		—			—			(473,291	)
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		—			87,243			—			(15,348	)		(87,243	)		—			—			—			—			(15,348	)
Book value as of December 31, 2021	W	833,524			174,043			28,608			389,215			18,309			—			1,520			14,593			—			1,459,812
Acquisition cost as of December 31, 2021	W	1,573,815			1,093,251			30,267			1,771,383			18,309			59,176			12,763			72,588			13,080			4,644,632
Accumulated amortization as of December 31, 2021	W	(718,807	)		(910,855	)		—			(1,318,476	)		—			(37,491	)		(11,243	)		—			(13,080	)		(3,009,952	)
Accumulated impairment loss as of December 31, 2021	W	(21,484	)		(8,353	)		(1,659	)		(63,692	)		—			(21,685	)		—			(57,995	)		—			(174,868	)

(*1) The Company 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 Company recognized an impairment loss amounting toW29,396 million for development projects which are not likely to generate revenue.

43

LG DISPLAY CO., LTD.

Notes to the Separate 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	715,104			975,739			55,988			2,580,777			14,203			59,176			11,074			72,588			13,079			4,497,728
Accumulated amortization as of January 1, 2020		(593,155	)		(809,994	)		—			(2,073,881	)		—			(37,491	)		(10,704	)		—			(13,079	)		(3,538,304	)
Accumulated impairment loss as of January 1, 2020		(21,690	)		(7,733	)		(10,561	)		(131,713	)		—			(21,685	)		—			(57,995	)		—			(251,377	)
Book value as of January 1, 2020	W	100,259			158,012			45,427			375,183			14,203			—			370			14,593			—			708,047
Additions - internally developed		—			—			—			284,487			—			—			—			—			—			284,487
Additions - external purchases		304,252			7,788			—			—			50,988			—			—			—			3			363,031
Amortization (*1)		(23,860	)		(69,546	)		—			(278,799	)		—			—			(370	)		—			(3	)		(372,578	)
Disposals		—			—			(17,073	)		—			—			—			—			—			—			(17,073	)
Impairment loss (*3)		—			(675	)		—			(78,918	)		—			—			—			—			—			(79,593	)
Reversal of impairment loss		—			—			1,110			—			—			—			—			—			—			1,110
Transfer from construction-in-progress		—			55,074			—			—			(55,074	)		—			—			—			—			—
Book value as of December 31, 2020	W	380,651			150,653			29,464			301,953			10,117			—			—			14,593			—			887,431
Acquisition cost as of December 31, 2020	W	979,514			1,041,468			38,915			2,865,264			10,117			59,176			11,074			72,588			13,082			5,091,198
Accumulated amortization as of December 31, 2020	W	(577,290	)		(882,407	)		—			(2,352,680	)		—			(37,491	)		(11,074	)		—			(13,082	)		(3,874,024	)
Accumulated impairment loss as of December 31, 2020	W	(21,573	)		(8,408	)		(9,451	)		(210,631	)		—			(21,685	)		—			(57,995	)		—			(329,743	)

(*1) The Company 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 Company recognized an impairment loss amounting toW78,918 million for development projects which are not likely to generate revenue.

44

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2021 and 2020

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

(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

45

LG DISPLAY CO., LTD.

Notes to the Separate 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 Company’s Display CGU which constitutes a large portion of the Company’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	14,593		14,593

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 Company’s products used in the forecast was determined considering external sources and the Company’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 Company. Cost of debt was calculated using the yield rate of non-guaranteed corporate bond considering the Company’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 Company. The Company 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, the Company concluded that there was no impairment to Display CGU. 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.

46

LG DISPLAY CO., LTD.

Notes to the Separate 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	—		326,400
Current portion of long-term borrowings and bonds		2,529,388		1,769,735
Current portion of payment guarantee liabilities		3,462		4,576
Derivatives(*1)		8,594		58,875
Cash flow hedging derivatives(*2)		13,400		—
Lease liabilities		2,852		3,403
	W	2,557,696		2,162,989
Non-current
Won denominated borrowings	W	2,173,500		2,435,000
Foreign currency denominated borrowings		1,861,235		1,572,160
Bonds		995,976		1,948,541
Payment guarantee liabilities		2,746		5,797
Derivatives(*1)		2,331		108,750
Lease liabilities		2,367		1,977
	W	5,038,155		6,072,225

(*1) Represents cross currency interest rate swap contracts and others entered into by the Company 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 Company 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
Foreign currency equivalent			—		USD 300

47

LG DISPLAY CO., LTD.

Notes to the Separate 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 and USD)
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
Foreign currency equivalent			USD 1,825			USD 1,545
Less current portion of long-term borrowings			(302,303	)		(108,800	)
		W	1,861,235			1,572,160

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

48

LG DISPLAY CO., LTD.

Notes to the Separate 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).

49

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2021 and 2020

11. Financial Liabilities, Continued

(f) Details of the convertible bonds issued by the Company and outstanding 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 Company has a right to redeem before maturity (call option) or the bondholders have a right to require the 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 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 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

50

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2021 and 2020

12. Employee Benefits

The Company’s 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 Company.

The defined benefit plans expose the Company 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	1,678,148			1,392,293
Fair value of plan assets		(1,746,424	)		(1,617,290	)
	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	1,392,293			1,476,866
Current service cost		148,430			161,898
Interest cost		35,902			35,490
Remeasurements (before tax)		205,318			(155,700	)
Benefit payments		(100,997	)		(123,616	)
Net transfers from (to) related parties		(2,798	)		(2,645	)
Defined benefit obligations at December 31	W	1,678,148			1,392,293

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

51

LG DISPLAY CO., LTD.

Notes to the Separate 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	1,617,290			1,604,118
Expected return on plan assets		41,797			38,595
Remeasurements (before tax)		(15,483	)		(7,264	)
Contributions by employer directly to plan assets		200,000			100,000
Benefit payments		(97,180	)		(118,159	)
Fair value of plan assets at December 31	W	1,746,424			1,617,290

(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	1,746,424		1,617,290

As of December 31, 2021, the Company 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	148,430			161,898
Net interest cost		(5,895	)		(3,105	)
	W	142,535			158,793

Expenses are recognized in the separate statements of comprehensive income (loss) as follows:

(In millions of won)
	2021		2020
Cost of sales	W	110,750		122,245
Selling expenses		6,250		8,129
Administrative expenses		15,171		16,499
Research and development expenses		10,364		11,920
	W	142,535		158,793

52

LG DISPLAY CO., LTD.

Notes to the Separate 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	38,196			(72,208	)
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	)
	W	(220,801	)		148,436
Income tax	W	57,438			(38,032	)
Balance at December 31	W	(125,167	)		38,196

(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	%

53

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2021 and 2020

12. Employee Benefits, Continued

(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	)

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	270,834			14,906			285,740
Additions (reversal)		183,193			(5,659	)		177,534
Usage		(198,467	)		—			(198,467	)
Balance at December 31, 2021	W	255,560			9,247			264,807
Current	W	162,618			9,247			171,865
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 Company’s warranty obligation.

54

LG DISPLAY CO., LTD.

Notes to the Separate 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 Company and other TFT-LCD manufacturers alleging violations of EU competition law. While the Company continues its vigorous defense of the various pending proceedings described above, as of December 31, 2021, the Company 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 Company and television manufacturers. 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 Company is involved in various lawsuits and disputes in addition to the pending proceedings described above. The Company 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 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 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 Company has sold its accounts receivable with recourse.

The Company has a credit facility agreement with Shinhan Bank and several other banks pursuant to which the Company could sell its accounts receivables up to an aggregate ofW522,708 million in connection with its domestic and export sales transactions and, as of December 31, 2021,W42,930 million accounts and notes receivable sold to Shinhan Bank and several other banks were outstanding in connection with the agreement. In connection with the contract above, the Company has sold its accounts receivable without recourse.

55

LG DISPLAY CO., LTD.

Notes to the Separate 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 Company 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 300		355,650
KB Kookmin Bank		USD 100		118,550
MUFG Bank		USD 100		118,550
The Export–Import Bank of Korea		USD 200		237,100
		USD 1,300	W	1,541,150

Payment guarantees

The Company provides payment guarantees to LG Display Vietnam Haiphong Co., Ltd. in connection with the principal amount of term loan credit facilities amounting to USD 957 million (W1,134,128 million).

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

License agreements

As of December 31, 2021, the Company 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 Company has a trademark license agreement with LG Corp. and other intellectual property license agreements with various companies as of December 31, 2021.

15. Share Capital and Share Premium

The Company is authorized to issue 500,000,000 shares of capital stock (par valueW5,000), 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 Company’s capital surplus consists of share premium. There have been no changes in share premium from January 1, 2020 to December 31, 2021

56

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2021 and 2020

16. Retained earnings and Reserves

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

(In millions of won)
	December 31, 2021			December 31, 2020
Legal reserve	W	212,158			212,158
Other reserve		68,251			68,251
Defined benefit plan actuarial income (loss)		(125,167	)		38,196
Unappropriated retained earnings		6,456,611			5,904,438
	W	6,611,853			6,223,043

(b) For the years ended December 31, 2021 and 2020, details of the Company’s appropriations of retained earnings are as follows:

(In millions of won, except for cash dividend per common stock)
	2021		2020
Retained earnings before appropriations
Unappropriated retained earnings carried over from prior year	W	5,904,438		6,417,700
Profit(Loss) for the year		552,173		(513,262	)
	W	6,456,611		5,904,438
Appropriation of retained earnings (*)
Earned surplus reserve	W	23,258		—
Cash dividend (Dividend per share (Dividend ratio): W650(13% of par value))		232,580		—
	W	255,838		—
Unappropriated retained earnings carried forward to the following year	W	6,200,773		5,904,438

(*) Expected date of appropriation for the year ended December 31, 2021 is March 23, 2022 and the date of appropriation for the year ended December 31, 2020 is March 23, 2021.

(c) Reserves

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

(In millions of won)
	December 31, 2021			December 31, 2020
Gain or loss on valuation of derivatives(*)	W	(9,227	)		—

(*) 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.

57

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2021 and 2020

17. 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	28,307,144		22,719,575
Royalties		29,706		50,681
Others		28,064		29,017
	W	28,364,914		22,799,273

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	(712,875	)		108,177
Purchases of raw materials, merchandise and others		9,262,023			8,539,506
Depreciation and amortization		2,532,888			2,519,199
Outsourcing		10,712,848			7,612,513
Labor		2,826,561			2,116,004
Supplies and others		843,200			643,432
Utility		717,347			664,869
Fees and commissions		445,531			370,041
Shipping		78,566			55,959
Advertising		125,992			112,678
Warranty		183,193			277,448
Travel		54,754			57,210
Taxes and dues		63,502			57,199
Others		603,281			637,071
	W	27,736,811			23,771,306

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

58

LG DISPLAY CO., LTD.

Notes to the Separate 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	265,397		191,932
Expenses related to defined benefit plans		21,530		24,697
Other employee benefits		53,857		42,475
Shipping		53,955		38,106
Fees and commissions		167,244		125,125
Depreciation		137,906		88,315
Taxes and dues		3,351		3,099
Advertising		125,992		112,678
Warranty		183,193		277,448
Insurance		8,755		7,806
Travel		4,681		6,070
Training		12,261		6,941
Others		55,116		40,069
	W	1,093,238		964,761

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	2,423,319		1,765,366
Other employee benefits		337,808		257,427
Contributions to National Pension plan		68,177		67,241
Expenses related to defined benefit plans and defined contribution plans		143,382		159,409
	W	2,972,686		2,249,443

59

LG DISPLAY CO., LTD.

Notes to the Separate 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	852,692		1,204,657
Gain on disposal of property, plant and equipment		24,647		43,155
Gain on disposal of intangible assets		196		—
Reversal of impairment loss on intangible assets		1,152		1,110
Rental income		1,803		1,692
Others		8,923		14,990
	W	889,413		1,265,604

(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	786,766		1,281,183
Loss on disposal of property, plant and equipment		49,871		58,852
Impairment loss on property, plant and equipment		10,662		11,482
Loss on disposal of intangible assets		—		368
Impairment loss on intangible assets		29,488		79,593
Donations		422		378
Others		3,385		8,381
	W	880,594		1,440,237

60

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2021 and 2020

22. Finance Income and Finance Costs

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	2,511		8,614
Dividend income		8,318		8,239
Foreign currency gain		23,684		243,071
Gain on disposal of investments		—		8,392
Reversal of impairment loss on investments		5,956		5,144
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		2,193		58
Others	W	4,868		6,067
		291,665		304,344
Finance costs
Interest expense	W	224,537		221,131
Foreign currency loss		309,940		65,404
Loss on repayment of borrowings		250		794
Impairment loss on investments		2,720		2,104
Loss on sale of trade accounts and notes receivable		128		1,870
Loss on valuation of financial assets at fair value through profit or loss		195		2,130
Loss on valuation of financial liabilities at fair value through profit or loss		68,421		36,798
Loss on transaction of derivatives		1,049		291
Loss on valuation of derivatives		21,795		187,344
Others		181		1,635
	W	629,216		519,501

61

LG DISPLAY CO., LTD.

Notes to the Separate 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	4,089			5,172
Adjustment for prior years(*1)		42,854			(52,574	)
	W	46,943			(47,402	)
Deferred tax expense (benefit)
Origination and reversal of temporary differences and others	W	(167,864	)		(361,075	)
Change in unrecognized deferred tax assets(*2)		(38,053	)		(281,030	)
	W	(205,917	)		(642,105	)
Income tax benefit	W	(158,974	)		(689,507	)

(*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	)		—		—			—
	W	(233,296	)		60,706		(172,590	)		148,436		(38,032	)		110,404

62

LG DISPLAY CO., LTD.

Notes to the Separate 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			552,173					(513,262	)
Income tax expense (benefit)				(158,974	)				(689,507	)
Profit(loss) before income tax				393,199					(1,202,769	)
Income tax expense (benefit) using the Company’s statutory tax rate		26.16	%	102,861			25.53	%	(307,067	)
Non-deductible expenses (non-taxable income)		0.18	%	691			0.27	%	(3,270	)
Tax credits		(14.35	%)	(56,439	)		6.06	%	(72,884	)
Change in unrecognized deferred tax assets(*1)		(9.68	%)	(38,053	)		22.18	%	(266,771	)
Adjustment for prior years(*2)		(32.84	%)	(129,112	)		3.93	%	(47,229	)
Effect on change in tax rate		(9.83	%)	(38,666	)		(0.61	%)	7,386
Others		(0.07	%)	(256	)		(0.03	%)	328
Income tax benefit	W			(158,974	)				(689,507	)
Effective tax rate				(*3)					(*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 Company recognized deferred tax assets for the amount which double taxation effect is expected to be eliminated from mutual agreement procedures, however, the Company is exposed to an uncertainty which may results in double taxation.

63

LG DISPLAY CO., LTD.

Notes to the Separate 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 toW308,402 million, the Company did not recognize deferred tax liabilities since the 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 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

64

LG DISPLAY CO., LTD.

Notes to the Separate 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	—		—		(16	)		(13	)		(16	)		(13	)
Inventories, net		34,248		38,700		—			—			34,248			38,700
Defined benefit liabilities		—		—		(26,642	)		(35,617	)		(26,642	)		(35,617	)
Accrued expenses		241,238		115,762		—			—			241,238			115,762
Property, plant and equipment		462,577		476,162		—			—			462,577			476,162
Intangible assets		15,886		16,226		—			—			15,886			16,226
Provisions		68,893		70,125		—			—			68,893			70,125
Other temporary differences		68,349		81,585		(2,095	)		(2,045	)		66,254			79,540
Tax loss carryforwards		886,467		819,133		—			—			886,467			819,133
Tax credit carryforwards		489,505		391,769		—			—			489,505			391,769
Deferred tax assets (liabilities)	W	2,267,163		2,009,462		(28,753	)		(37,675	)		2,238,410			1,971,787

(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 income		December 31, 2021
Other accounts receivable, net	W	(4,364	)		4,351			—			(13	)		(3	)		—		(16	)
Inventories, net		78,730			(40,030	)		—			38,700			(4,452	)		—		34,248
Defined benefit liabilities, net		—			2,415			(38,032	)		(35,617	)		(48,463	)		57,438		(26,642	)
Accrued expenses		120,854			(5,092	)		—			115,762			125,476			—		241,238
Property, plant and equipment		465,883			10,279			—			476,162			(13,585	)		—		462,577
Intangible assets		19,422			(3,196	)		—			16,226			(340	)		—		15,886
Provisions		59,875			10,250			—			70,125			(1,232	)		—		68,893
Other temporary differences		52,293			27,247			—			79,540			(16,554	)		3,268		66,254
Tax loss carryforwards		536,684			282,449			—			819,133			67,334			—		886,467
Tax credit carryforwards		38,337			353,432			—			391,769			97,736			—		489,505
Deferred tax assets (liabilities)	W	1,367,714			642,105			(38,032	)		1,971,787			205,917			60,706		2,238,410

65

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2021 and 2020

25. Earnings (Loss) per Share

(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) for the year	W	552,173,088,265		(513,262,046,420	)
Weighted-average number of common stocks outstanding		357,815,700		357,815,700
Basic earnings (loss) per share	W	1,543		(1,434	)

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 for the year	W	552,173,088,265
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 for the year		614,077,277,590
Weighted-average number of common stocks outstanding after adjustment		398,804,698
Diluted earnings per share	W	1,540

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.

66

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2021 and 2020

26. Financial Risk Management

The Company is exposed to credit risk, liquidity risk and market risks. The Company 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 Company’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 Company is exposed to currency risk on sales, purchases and borrowings that are denominated in a currency other than the functional currency of the Company, Korean won (KRW). The currencies in which these transactions primarily are denominated are USD, 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 Company, primarily KRW and USD.

The Company 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 Company 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.

67

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2021 and 2020

26. Financial Risk Management, Continued

i) Exposure to currency risk

The Company’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		PLN		EUR
Cash and cash equivalents		800			80			4		1		—
Trade accounts and notes receivable		4,167			4,462			—		—		—
Other accounts receivables		47			70			22		—		—
Trade accounts and notes payable		(4,014	)		(8,296	)		—		—		—
Other accounts payable		(1,144	)		(4,274	)		—		—		(3	)
Financial liabilities		(2,782	)		—			—		—		—
		(2,926	)		(7,958	)		26		1		(3	)
Cross currency interest rate swap contracts(*)		1,545			—			—		—		—
Net exposure		(1,381	)		(7,958	)		26		1		(3	)

(*) 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.

(In millions)	December 31, 2020
	USD			JPY			CNY			PLN		EUR			GBP
Cash and cash equivalents		1,112			7			41			2		—			—
Trade accounts and notes receivable		3,425			1,782			—			—		—			—
Other accounts receivables		79			90			—			—		6			—
Trade accounts and notes payable		(3,035	)		(8,853	)		—			—		—			—
Other accounts payable		(266	)		(4,765	)		(25	)		—		(1	)		(2	)
Financial liabilities		(3,034	)		—			—			—		—			—
		(1,719	)		(11,739	)		16			2		5			(2	)
Cross currency interest rate swap contracts		2,225			—			—			—		—			—
Net exposure		506			(11,739	)		16			2		5			(2	)

68

LG DISPLAY CO., LTD.

Notes to the Separate 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	W	1,185.50		1,088.00
JPY		10.42		11.05		10.30		10.54
CNY		177.36		170.90		186.26		166.96
PLN		296.51		302.95		292.11		292.02
EUR		1,353.25		1,345.71		1,342.34		1,338.24
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 Company’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 Company 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	(60,445	)		(60,445	)	W	19,957			19,957
JPY (5 percent weakening)		(3,027	)		(3,027	)		(4,486	)		(4,486	)
CNY (5 percent weakening)		179			179			97			97
PLN (5 percent weakening)		11			11			21			21
EUR (5 percent weakening)		(149	)		(149	)		243			243
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.

iii) Derivatives for cash flow hedge

In relation to forecast export transactions, the 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 toW905 million andW13,400 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.

69

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2021 and 2020

26. Financial Risk Management, Continued

(ii) Interest rate risk

Interest rate risk arises principally from the Company’s variable interest-bearing bonds and borrowings. The Company 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 Company entered into cross currency interest rate swap contracts amounting to USD 1,445 million (W1,713,048 million) and interest rate swap contracts amounting toW170,000 million in notional amount to hedge interest rate risk with respect to variable interest bearing borrowings.

i) Profile

The interest rate profile of the Company’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	1,027,808			1,297,022
Financial liabilities		(5,145,326	)		(5,792,416	)
	W	(4,117,518	)		(4,495,394	)
Variable rate instruments
Financial liabilities	W	(2,414,773	)		(2,259,420	)

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	(3,928	)		3,928		(3,928	)		3,928
December 31, 2020
Variable rate instruments(*)	W	(2,333	)		2,333		(2,333	)		2,333

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

70

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2021 and 2020

26. Financial Risk Management, Continued

(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 Company does not have financial instruments affected by discontinued LIBORs. The Company 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 Company does not have plan to change to KOFR.

The Company 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 Company 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 Company 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 Company 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 Company 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:

(In millions of won)	Total amount of unreformed contracts(*)
Non-derivative financial liabilities
Borrowings	W	1,635,990
Derivative assets
Cross currency interest rate swap contracts	W	43,406
Derivative liabilities
Cross currency interest rate swap contracts	W	7,820

(*) The company completed the insertion of a fallback clause for all unreformed contracts.

71

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2021 and 2020

26. Financial Risk Management, Continued

(b) Credit risk

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

The Company’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 Company 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 Company recognizes the changes in expected credit loss (“ECL”) in profit or loss at each reporting date.

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk as of December 31, 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	950,847		1,220,098
Deposits in banks		76,924		76,863
Trade accounts and notes receivable, net		5,051,836		3,797,248
Non-trade receivables		77,147		130,217
Accrued income		2,792		11,115
Deposits		11,542		17,789
Short-term loans		22,518		28,491
Long-term loans		19,939		13,899
Long-term non-trade receivables		5,122		5,797
	W	6,218,667		5,301,517
Financial assets at fair value through profit or loss
Convertible bonds	W	1,573		1,289
Derivatives		65,612		9,363
	W	67,185		10,652
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	6,286,805		5,312,241

72

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2021 and 2020

26. Financial Risk Management, Continued

In addition to the financial assets above, as of December 31, 2021, the Company provides payment guarantees in connection with the principal amount of credit facilities amounting to USD 957 million (W1,134,128 million) (see note 14).

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

(c) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or other financial assets. The Company’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 Company’s reputation.

The Company has historically been able to satisfy its cash requirements from cash flows from operations and debt and equity financing. To the extent that the Company does not generate sufficient cash flows from operations to meet its capital requirements, the Company 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 Company maintains a line of credit with various banks.

73

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2021 and 2020

26. Financial Risk Management, Continued

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	4,948,538		5,179,140		582,466		441,859		1,769,319		2,385,496		—
Bonds		2,611,561		2,531,468		575,029		884,996		329,661		652,467		89,315
Trade accounts and notes payable		6,528,451		6,528,451		6,183,078		345,373		—		—		—
Other accounts payable		1,726,734		1,728,654		1,623,312		105,342		—		—		—
Other accounts payable (enterprise procurement cards)(*1)		1,074,089		1,074,089		1,023,130		50,959		—		—		—
Long-term other accounts payable		460,995		547,774		—		—		99,606		249,004		199,164
Payment guarantee(*2)		6,208		1,154,117		278,049		159,208		403,596		313,264		—
Security deposits received		11,180		11,180		2,860		5,590		2,730		—		—
Lease liabilities		5,219		5,385		1,644		1,383		1,891		467		—
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	17,397,300		18,782,036		10,288,441		1,997,074		2,607,344		3,600,698		288,479

(*1) Represents liabilities payable to credit card companies for utility expenses and others paid using enterprise procurement cards. The Company presented the payable to credit card companies as other accounts payable and disclosed related cash flows as operating activities since the Company 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

74

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2021 and 2020

26. Financial Risk Management, Continued

(*2) Contractual cash flows of payment guarantee is identical to timing of principal and interest payment and represent the maximum amount that the Company could be required to pay the guarantee amount.

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

(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	18,835,304			16,441,967
Total equity		10,642,818			10,263,235
Cash and deposits in banks (*1)		1,027,760			1,296,950
Borrowings (including bonds)		7,560,099			8,051,836
Total liabilities to equity ratio		177	%		160	%
Net borrowings to equity ratio (*2)		61	%		66	%

(*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.

75

LG DISPLAY CO., LTD.

Notes to the Separate 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 Company’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 instruments

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.

76

LG DISPLAY CO., LTD.

Notes to the Separate 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 separate 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	950,847		(	*)		1,220,098		(	*)
Deposits in banks		76,924		(	*)		76,863		(	*)
Trade accounts and notes receivable		5,051,836		(	*)		3,797,248		(	*)
Non-trade receivables		77,147		(	*)		130,217		(	*)
Accrued income		2,792		(	*)		11,115		(	*)
Deposits		11,542		(	*)		17,789		(	*)
Short-term loans		22,518		(	*)		28,491		(	*)
Long-term loans		19,939		(	*)		13,899		(	*)
Long-term non-trade receivables		5,122		(	*)		5,797		(	*)
Financial assets at fair value through profit or loss
Equity instruments	W	3,096		3,096			1,381		1,381
Convertible bonds		1,573		1,573			1,289		1,289
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	4,948,538		4,960,360			5,279,920		5,311,440
Bonds		1,595,801		1,596,044			1,910,241		1,923,517
Trade accounts and notes payable		6,528,451		(	*)		4,591,319		(	*)
Other accounts payable		2,800,823		(	*)		2,373,730		(	*)
Long-term other accounts payable		460,995		(	*)		—		(	*)
Payment guarantee liabilities		6,208		(	*)		10,373		(	*)
Security deposits received		11,180		(	*)		12,350		(	*)
Lease liabilities		5,219		(	*)		5,380		(	*)

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

77

LG DISPLAY CO., LTD.

Notes to the Separate 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

78

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2021 and 2020

26. Financial Risk Management, Continued

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	—		—		3,096		3,096
Convertible bonds		—		—		1,573		1,573
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	—		—		1,381		1,381
Convertible bonds		—		—		1,289		1,289
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

79

LG DISPLAY CO., LTD.

Notes to the Separate 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	—		—		4,960,360		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	—		—		5,311,440		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%

80

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2021 and 2020

27. Leases

The Company leases buildings, vehicles, machinery and equipment and others. Information about leases for which the Company 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			Land			Machinery and equipment			Vehicles			Others			Total
Balance at January 1	W	682			36			1,213			3,501			—			5,432
Additions		7,759			40			867			3,785			49			12,500
Depreciation		(8,409	)		(40	)		(1,097	)		(3,088	)		(8	)		(12,642	)
Balance at December 31	W	32			36			983			4,198			41			5,290

(In millions of won)
	2020
	Buildings			Land			Machinery and equipment			Vehicles			Others			Total
Balance at January 1	W	922			1			1,180			4,282			30			6,415
Additions		7,748			39			1,163			2,241			2			11,193
Depreciation		(7,988	)		(4	)		(1,130	)		(3,022	)		(32	)		(12,176	)
Balance at December 31	W	682			36			1,213			3,501			—			5,432

(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	(298	)		(590	)
Expenses relating to short-term leases		(330	)		(976	)
Expenses relating to leases of low-value assets		(554	)		(70	)

(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	5,380			6,557
Additions		12,200			10,606
Interest expense		298			590
Repayment of liabilities		(12,659	)		(12,373	)
Balance at December 31	W	5,219			5,380

81

LG DISPLAY CO., LTD.

Notes to the Separate 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	326,400		(355,980	)		—			29,580		—		—			—
Current portion of long-term borrowings and bonds(*)		1,769,735		(2,314,432	)		2,835,202			160,134		10,078		68,671			2,529,388
Payment guarantee liabilities		10,373		5,009			—			—		—		(9,174	)		6,208
Long-term borrowings		4,007,160		1,298,346			(1,365,340	)		94,569		—		—			4,034,735
Bonds		1,948,541		498,027			(1,469,862	)		9,732		9,538		—			995,976
Lease liabilities		5,380		(12,659	)		—			—		—		12,498			5,219
	W	8,067,589		(881,689	)		—			294,015		19,616		71,995			7,571,526

(*) Others includeW68,421 million of loss on valuation of financial liabilities at fair value through profit or loss.

82

LG DISPLAY CO., LTD.

Notes to the Separate 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
Subsidiaries(*)	LG Display America, Inc. and others
Associates(*)	Paju Electric Glass Co., Ltd. and others
Entity that has significant influence over the Company	LG Electronics Inc.
Subsidiaries of the entity that has significant influence over the Company	Subsidiaries of LG Electronics Inc.

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

83

LG DISPLAY CO., LTD.

Notes to the Separate 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
					Purchase and others
	Sales and others		Dividend income		Purchase of raw material and others		Acquisition of property, plant and equipment		Outsourcing fees		Other costs
Subsidiaries
LG Display America, Inc.	W	13,652,084		—		—		—		—		43
LG Display Japan Co., Ltd.		2,300,278		—		—		—		—		—
LG Display Germany GmbH		2,208,373		—		—		—		—		24,149
LG Display Taiwan Co., Ltd.		2,164,693		—		—		—		—		1,093
LG Display Nanjing Co., Ltd.		34,394		—		5,459		—		1,747,273		23,103
LG Display Shanghai Co., Ltd.		780,145		—		—		—		—		—
LG Display Guangzhou Co., Ltd.		12,413		—		7,089		—		2,486,141		21,944
LG Display Shenzhen Co., Ltd.		490,993		—		—		—		—		17
LG Display Yantai Co., Ltd.		585		—		18,586		—		603,473		9,206
LG Display (China) Co., Ltd.		2,881		—		1,708,573		3,108		—		2,030
LG Display Singapore Pte. Ltd.		2,041,539		—		—		—		—		395
L&T Display Technology (Fujian) Limited		403,094		4,250		1		—		—		401
Nanumnuri Co., Ltd.		207		—		—		—		—		22,272
LG Display Guangzhou Trading Co., Ltd.		1,522,700		—		—		—		—		—
LG Display Vietnam Haiphong Co., Ltd.		23,868		—		46,992		—		2,533,844		15,482
Suzhou Lehui Display Co., Ltd.		348,556		—		50,628		—		—		3
LG Display High-Tech (China) Co., Ltd.		19,951		—		2,321		—		2,729,188		6,077
	W	26,006,754		4,250		1,839,649		3,108		10,099,919		126,215

84

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2021 and 2020

29. Related Parties and Others, Continued

(In millions of won)	2021
					Purchase and others
	Sales and Others		Dividend income		Purchase of raw material and others		Acquisition of property, plant and equipment		Outsourcing fees		Other costs
Associates	W
WooRee E&L Co., Ltd.		—		—		492		—		—		79
AVATEC Co., Ltd.		—		200		713		—		72,156		1,485
Paju Electric Glass Co., Ltd.		—		3,668		365,400		—		—		2,734
YAS Co., Ltd.		—		200		10,337		44,732		—		9,824
Cynora		—		—		10		—		—		—
Material Science Co., Ltd.		—		—		187		—		—		—
	W	—		4,068		377,139		44,732		72,156		14,122
Entity that has significant influence over the Company
LG Electronics Inc.	W	264,044		—		11,666		195,222		—		119,639

85

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2021 and 2020

29. Related Parties and Others, Continued

(In millions of won)	2021
					Purchase and others
	Sales and others		Dividend income		Purchase of raw material and others		Acquisition of property, plant and equipment		Outsourcing fees		Other costs
Subsidiaries of the entity that has significant influence over the Company
LG Electronics India Pvt. Ltd.	W	97,475		—		—		—		—		418
LG Electronics Vietnam Haiphong Co., Ltd.		414,806		—		—		—		—		1,445
LG Electronics Reynosa S.A. DE C.V.		—		—		—		—		—		1,011
LG Electronics Mexicali, S.A. DE C.V.		39,153		—		—		—		—		89
LG Electronics RUS, LLC		—		—		—		—		—		139
LG Electronics Egypt S.A.E.		106,469		—		—		—		—		129
LG Innotek Co., Ltd.		3,333		—		140		451		—		85,471
P.T. LG Electronics Indonesia		272,316		—		—		—		—		574
Others		33,529		—		44		—		—		14,207
	W	967,081		—		184		451		—		103,483
	W	27,237,879		8,318		2,228,638		243,513		10,172,075		363,459

86

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2021 and 2020

29. Related Parties and Others, Continued

(In millions of won)	2020
					Purchase and others
	Sales and others		Dividend income		Purchase       of raw material and others		Acquisition of property,     plant and     equipment		Outsourcing fees		Other costs
Subsidiaries
LG Display America, Inc.	W	11,375,998		—		—		—		—		—
LG Display Japan Co., Ltd.		1,905,919		—		—		—		—		12
LG Display Germany GmbH		1,427,576		—		—		—		—		6,006
LG Display Taiwan Co., Ltd.		1,423,566		—		—		—		—		972
LG Display Nanjing Co., Ltd.		10,276		—		5,319		650		1,444,703		26,526
LG Display Shanghai Co., Ltd.		758,404		—		—		—		—		—
LG Display Poland Sp. z o.o.		8,392		—		—		—		—		—
LG Display Guangzhou Co., Ltd.		14,805		—		9,554		—		1,859,853		29,725
LG Display Shenzhen Co., Ltd.		550,715		—		—		—		—		—
LG Display Yantai Co., Ltd.		146		—		10,469		622		930,420		28,359
LG Display (China) Co., Ltd.		4,937		—		1,569,563		3,564		—		2,189
LG Display Singapore Pte. Ltd.		1,159,958		—		—		—		—		624
L&T Display Technology (Fujian) Limited		330,760		—		—		—		—		439
Nanumnuri Co., Ltd.		208		—		—		—		—		18,745
Global OLED Technology, LLC		—		—		—		—		—		5,472
LG Display Guangzhou Trading Co., Ltd.		1,361,805		—		—		—		—		—
LG Display Vietnam Haiphong Co., Ltd.		17,355		—		67,607		—		1,743,814		24,378
Suzhou Lehui Display Co., Ltd.		272,678		—		21,680		—		—		—
LG Display High-Tech (China) Co., Ltd.		39,488		—		2,627		—		1,292,870		6,251
	W	20,662,986		—		1,686,819		4,836		7,271,660		149,698

87

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2021 and 2020

29. Related Parties and Others, Continued

(In millions of won)	2020
					Purchase and others
	Sales and Others		Dividend income		Purchase of raw material and others		Acquisition of property, plant and equipment		Outsourcing fees		Other costs
Associates
WooRee E&L Co., Ltd.	W	—		—		50		—		—		35
AVATEC Co., Ltd.		22		200		80		—		74,070		1,112
Paju Electric Glass Co., Ltd.		—		7,739		299,739		—		—		2,862
YAS Co., Ltd.		—		300		6,648		11,981		—		3,790
Material Science Co., Ltd.		—		—		93		—		—		—
	W	22		8,239		306,610		11,981		74,070		7,799
Entity that has significant influence over the Company
LG Electronics Inc.	W	641,579		—		9,644		76,947		—		137,921

88

LG DISPLAY CO., LTD.

Notes to the Separate Financial Statements

For the years ended December 31, 2021 and 2020

29. Related Parties and Others, Continued

(In millions of won)	2020
					Purchase and others
	Sales and others		Dividend income		Purchase of raw material and others		Acquisition of property, plant and equipment		Outsourcing fees		Other costs
Subsidiaries of the entity that has significant influence over the Company
LG Electronics India Pvt. Ltd.	W	53,441		—		—		—		—		173
LG Electronics Vietnam Haiphong Co., Ltd.		332,977		—		—		—		—		1,125
LG Electronics Reynosa S.A. DE C.V.		—		—		—		—		—		1,044
LG Electronics Mexicali, S.A. DE C.V.		29,565		—		—		—		—		52
LG Electronics RUS, LLC		—		—		—		—		—		303
LG Electronics Egypt S.A.E.		69,853		—		—		—		—		375
LG Innotek Co., Ltd.		4,599		—		664		—		—		76,530
Qingdao LG Inspur Digital Communication Co., Ltd.		7,065		—		—		—		—		—
P.T. LG Electronics Indonesia		157,820		—		—		—		—		164
Others		26,673		—		12		—		—		10,911
	W	681,993		—		676		—		—		90,677
	W	21,986,580		8,239		2,003,749		93,764		7,345,730		386,095

89

LG DISPLAY CO., LTD.

Notes to the Separate 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
Subsidiaries
LG Display America, Inc.	W	1,851,411		1,341,210		25		5
LG Display Japan Co., Ltd.		462,618		344,276		5		12
LG Display Germany GmbH		586,120		287,359		23,593		7
LG Display Taiwan Co., Ltd.		445,830		296,556		151		95
LG Display Nanjing Co., Ltd.		334		2,465		613,161		385,925
LG Display Shanghai Co., Ltd.		499,770		319,033		5		11
LG Display Guangzhou Co., Ltd.		691		1,337		774,672		341,389
LG Display Guangzhou Trading Co., Ltd.		418,302		498,483		—		—
LG Display Shenzhen Co., Ltd.		97,129		27,327		15		—
LG Display Yantai Co., Ltd.		—		—		76,722		140,076
LG Display (China) Co., Ltd.		3,805		1,394		215,709		314,934
LG Display Singapore Pte. Ltd.		172,755		218,280		1		10
L&T Display Technology (Fujian) Limited		72,298		41,971		224,941		149,845
Nanumnuri Co., Ltd.		—		—		5,261		1,773
LG Display Vietnam Haiphong Co., Ltd.		9,088		16,632		993,392		605,531
Suzhou Lehui Display Co., Ltd.		76,396		46,760		8,863		16,047
LG Display High-Tech (China) Co., Ltd.		4,914		10,821		715,930		388,053
	W	4,701,461		3,453,904		3,652,446		2,343,713

90

LG DISPLAY CO., LTD.

Notes to the Separate 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
Associates
WooRee E&L Co., Ltd.	W	878		—		157		18
AVATEC Co., Ltd.		3		—		2,748		2,714
Paju Electric Glass Co., Ltd.		—		—		79,302		84,095
YAS Co., Ltd.		—		—		14,773		9,134
Material Science Co., Ltd.		—		—		99		—
	W	881		—		97,079		95,961
Entity that has significant influence over the Company
LG Electronics Inc.	W	66,247		93,749		92,323		75,290

91

LG DISPLAY CO., LTD.

Notes to the Separate 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
Subsidiaries of the entity that has significant influence over the Company
LG Innotek Co., Ltd.	W	711		80		31,184		25,330
LG Electronics Reynosa S.A. DE C.V		—		—		10		50
LG Electronics Mexicali S.A. DE C.V.		5,625		3,043		—		5
LG Electronics India Pvt. Ltd.		7,319		3,697		111		—
LG Electronics Vietnam Haiphong Co., Ltd.		52,327		36,417		243		16
LG Electronics Egypt S.A.E		19,489		13,359		—		—
P.T. LG Electronics Indonesia		15,555		48,677		32		—
Others		3,754		2,302		3,155		1,192
	W	104,780		107,575		34,735		26,593
	W	4,873,369		3,655,228		3,876,583		2,541,557

92

LG DISPLAY CO., LTD.

Notes to the Separate 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.

93

LG DISPLAY CO., LTD.

Notes to the Separate 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 Company 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	549,184		101,044		27,279		13,892
LG Uplus Corp.		—		2,348		—		163
LG Chem Ltd. and its subsidiaries		150		377,981		2,944		66,535
S&I Corp. and its subsidiaries		313		260,319		5,862		121,637
LX Semicon Co., Ltd. (formerly, Silicon Works Co., Ltd)(*2)		2,551		442,654		117		86,346
LG Corp.		—		68,420		6,754		11,193
LG Management Development Institute		—		21,055		3,480		205
LG CNS Co., Ltd. and its subsidiaries		89		234,822		98		143,367
LG Household & Health Care Ltd. and its subsidiaries		—		71		—		50
G2R Inc. and its subsidiaries		—		23,519		—		11,931
Robostar Co., Ltd.		—		2,189		—		1,675
	W	552,287		1,534,422		46,534		456,994

(*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.

94

LG DISPLAY CO., LTD.

Notes to the Separate 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	376,848		88,437		81,353		13,104
LG Uplus Corp.		—		2,121		—		151
LG Chem Ltd. and its subsidiaries		1,071		440,577		2		81,929
S&I Corp. and its subsidiaries		324		180,027		5,864		56,014
Silicon Works Co., Ltd.		36		460,009		—		74,419
LG Corp.		—		57,200		6,799		1,417
LG Management Development Institute		—		8,294		3,480		351
LG CNS Co., Ltd. and its subsidiaries		228		144,408		251		79,708
LG Household & Health Care Ltd. and its subsidiaries		—		63		—		—
G2R Inc. and its subsidiaries		—		38,487		—		8,851
Robostar Co., Ltd.		—		1,132		—		814
	W	378,507		1,420,755		97,749		316,758

95

LG DISPLAY CO., LTD.

Notes to the Separate 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 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	W	391,653		(8,824	)
Changes in other accounts payable arising from the purchase of intangible assets		459,972		99,693
Recognition of right-of-use assets and lease liabilities		12,500		11,193

96

Independent Auditors’ Report on Internal Control over Financial Reporting

Based on a report originally issued in Korean

To the Shareholders and Board of Directors

LG Display Co., Ltd.:

Opinion on Internal Control over Financial Reporting

We have audited the Internal Control over Financial Reporting (“ICFR”) of LG Display Co., Ltd. (the “Company”) as of December 31, 2021, based on the criteria established in Conceptual Framework for Designing and Operating ICFR issued by the Operating Committee of ICFR.

In our opinion, the Company maintained, in all material respects, effective ICFR as of December 31, 2021, based on the criteria established in Conceptual Framework for Designing and Operating ICFR issued by the Operating Committee of ICFR in the Republic of Korea.

We also have audited, in accordance with Korean Standards on Auditing (“KSAs”), the separate statements of financial position of the Company as of December 31, 2021 and 2020, the related separate statements of comprehensive income(loss), changes in equity, and cash flows for the years then ended and notes including significant accounting policies and other explanatory information (collectively, the separate financial statements), and our report dated March 8, 2022 expressed an unmodified opinion on those separate financial statements.

Basis for Opinion

We conducted our audit in accordance with KSAs. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the ICFR section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the ICFR 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.

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

Management is responsible for designing, implementing, and maintaining effective ICFR, and for its assessment about the effectiveness of ICFR, included in the accompanying Report on the Operation of Internal Control over Financial Reporting.

Those charged with governance are responsible for overseeing the Company’s ICFR.

Auditors’ Responsibilities for the Audit of the Internal Control over Financial Reporting

Our responsibility is to express an opinion on the Company’s ICFR based on our audit. We conducted our audit in accordance with KSAs. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective ICFR was maintained in all material respects.

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

97

Definition and Inherent Limitations of Internal Control over Financial Reporting

An entity’s ICFR is a process effected by those charged with governance, management, and other personnel, designed to provide reasonable assurance regarding the preparation of reliable separate financial statements in accordance with Korean International Financial Reporting Standards (“K-IFRS”). An entity’s ICFR includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the entity; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of separate financial statements in accordance with K-IFRS and that receipts and expenditures of the entity are being made only in accordance with authorizations of management and those charged with governance; and (3) provide reasonable assurance regarding prevention, or timely detection and correction of unauthorized acquisition, use, or disposition of the entity’s assets that could have a material effect on the separate financial statements.

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

The engagement partner on the audit resulting in this independent auditors’ report is Han, Sang Hyun.

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 Company’s internal control over financial reporting. 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.

98

Report on the Operation of Internal Control over Financial Reporting

English translation of a Report Originally Issued in Korean

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

We, as the Internal Control over Financial Reporting (“ICFR”) Officer and Chief Executive Officer (“CEO”) of LG Display (“the Company”), assessed the effectiveness of the design and operation of the Company’s ICFR as of December 31, 2021.

The Company’s management, including myself, is responsible for designing and operating an IACS.

We assessed the design and operational effectiveness of the ICFR in the prevention and detection of an error or fraud which may cause a misstatement in the preparation and disclosure of reliable separate financial statements.

We used the ‘Conceptual Framework for Designing and Operating Internal Control over Financial Reporting’ established by the Operating Committee of Internal Control over Financial Reporting in Korea (the “ICFR Committee”) as the criteria for design and operation of the Company’s ICFR. And, we conducted an evaluation of ICFR based on the ‘Management Guideline for Evaluating and Reporting Effectiveness of Internal Control over Financial Reporting’ established by the ICFR Committee.

Based on our assessment, we concluded that the Company’s ICFR is effectively designed and operated as of December 31, 2021, in all material respects, in accordance with the ‘Conceptual Framework for Designing and Operating Internal Control over Financial Reporting.

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

January 21, 2022

Ho Young Jeong

Chief Executive Officer

Sung Hyun Kim

Internal Control over Financial Reporting Officer

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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