Accounting information and policies

12 Months Ended

Dec. 31, 2025

Disclosure Of Summary Of Significant Accounting Policies [Abstract]

Accounting information and policies

1. Accounting information and

policies

BASIS OF CONSOLIDATION

Group companies included in the consolidated financial statements for 2025 are

Unilever PLC (’PLC’) and all subsidiary undertakings, which are those entities

controlled by PLC. Control exists when the Group has the power to direct the

activities of an entity so as to affect the return on investment.

The net assets and results of acquired businesses are included in the

consolidated financial statements from their respective dates of acquisition, being

the date on which the Group obtains control.

The results of disposed businesses are included in the consolidated financial

statements up to their date of disposal, being the date control ceases.

Intra-group transactions and balances are eliminated.

COMPANY LEGISLATION AND ACCOUNTING

STANDARDS

The consolidated financial statements have been prepared in accordance with

International Financial Reporting Standards (IFRS) as issued by the International

Accounting Standards Board (IASB), and UK-adopted international accounting

standards. The consolidated financial statements comply with the Companies Act

2006. These financial statements are prepared under the historical cost

convention unless otherwise indicated.

GOING CONCERN

These financial statements have been prepared on a going concern basis.

The Group has considerable financial resources together with established

business relationships with many customers and suppliers in countries

throughout the world.

The Directors considered the Group’s overall financial position, exposure to principal

risks and future business forecasts. Specifically, they ensured that the expected cash

flows from those forecasts were sufficient to cover its obligations for the next 12

months from the date of approval of the financial statements. This also included

sensitivity considerations should the Group face an adverse environment leading to

reduced sales growth and operating margins versus forecasts. We describe in notes

15 to 18 on pages 161 to 176 the Group’s objectives, policies and processes for

managing its capital; its financial risk management objectives; details of its financial

instruments and hedging activities; and its exposures to credit and liquidity risk. The

Group has credit facilities available to raise short-term financing if necessary.

In conclusion, the Group is well placed to manage its business risks successfully

and meet its obligations for at least 12 months from the date of approval of the

financial statements.

ACCOUNTING POLICIES

The accounting policies adopted are the same as those which were applied for

the previous financial year except as set out below under the heading ‘Recent

accounting developments’.

Accounting policies are included in the relevant notes to the consolidated

financial statements. These are presented as text highlighted in grey on pages

133 to 183. The accounting policies below are applied throughout the financial

statements.

FOREIGN CURRENCIES

The consolidated financial statements are presented in euros.

Items included in the financial statements of individual group companies are recorded

in their respective functional currency, which is the currency of the primary economic

environment in which each entity operates.

Foreign currency transactions in individual group companies are translated into

functional currency using exchange rates at the date of the transaction. Foreign

exchange gains and losses from settlement of these transactions, and from

translation of monetary assets and liabilities at year-end exchange rates, are

recognised in the income statement except when deferred in equity as qualifying

hedges.

In preparing the consolidated financial statements, the balances in individual

group companies are translated from their functional currency into euros. Apart

from the financial statements of group companies in hyperinflationary economies

(see below), the income statement, the cash flow statement and all other

movements in assets and liabilities are translated at average rates of exchange

as a proxy for the transaction rate, or at the transaction rate itself if more

appropriate. Assets and liabilities are translated at year-end exchange rates.

The financial statements of group companies whose functional currency is

the currency of a hyperinflationary economy are adjusted for inflation and then

translated into euros using the balance sheet exchange rate. Amounts shown for prior

years for comparative purposes are not modified. To determine the existence of

hyperinflation, the Group assesses the qualitative and quantitative characteristics of

the economic environment of the country, such as the cumulative inflation rate over

the previous three years.

Effective from 1 January 2024, the functional currency of the Group’s ultimate

parent company, Unilever PLC (’PLC’) changed from sterling to euro. There was

no impact on the presentation of the Group results or restatements to the Group

financial statements as a result of this change.

As at 31 December 2023, the ordinary share capital of PLC was translated to

euro using the historical rate at the date the shares were issued (see note 15B

on page 162).

The effect of exchange rate changes during the year on net assets of foreign

operations is recorded in equity. For this purpose, net assets include loans between

group companies and any related foreign exchange contracts where settlement is

neither planned nor likely to occur in the foreseeable future.

The Group applies hedge accounting to certain exchange differences arising

between the functional currencies of a foreign operation and the functional

currency of the parent entity, regardless of whether the net investment is held

directly or through an intermediate parent. Differences arising on retranslation of

a financial liability designated as a foreign currency net investment hedge are

recorded in equity to the extent that the hedge is effective. These differences are

reported within profit or loss to the extent that the hedge is ineffective.

Cumulative exchange differences arising since the date of transition to IFRS of

1 January 2004 are reported as a separate component of other reserves. In the

event of disposal or part disposal of an interest in a group company either

through sale or as a result of a repayment of capital, the cumulative exchange

difference is recognised in the income statement as part of the profit or loss on

disposal of group companies.

HYPERINFLATIONARY ECONOMIES

The Argentinian economy was designated as hyperinflationary from 1 July 2018

and the Turkish economy was designated as hyperinflationary from 1 July 2022.

As a result, application of IAS 29 ‘Financial Reporting in Hyperinflationary

Economies’ has been applied to all Unilever entities whose functional currency is

the Argentinian peso or the Turkish lira. The application of IAS 29 includes:

■adjustment of historical cost non-monetary assets and liabilities for the change

in purchasing power caused by inflation from the date of initial recognition to

the balance sheet date;

■adjustment of the income statement for inflation during the reporting period;

■translation of income statement at the period-end foreign exchange rate

instead of an average rate; and

■adjustment of the income statement to reflect the impact of inflation and

exchange rate movement on holding monetary assets and liabilities in local

currency.

The main effects on the Group consolidated financial statements (including

discontinued operations) for 2025 are:

€ million	Argentina	Turkey	Total
Total assets increase/(reduction)	(199)	(20)	(219)
Turnover increase/(reduction)	(90)	(16)	(106)
Operating profit increase/(reduction)	(54)	(46)	(100)
Net monetary gain/(loss)	(46)	(10)	(56)

ASSETS AND LIABILITIES HELD FOR SALE AND

DISCONTINUED OPERATIONS

A disposal group is classified as held for sale or distribution when its carrying

amount is expected to be recovered principally through a sale or distribution to

shareholders rather than through continuing use. A discontinued operation is a

component of the Group that has been disposed of or is classified as held for

sale or distribution and represents a separate major line of business. In

accordance with IFRS 5, the results of discontinued operations are presented

separately in the consolidated income statement, consolidated statement of

comprehensive income, consolidated statement of cash flows and related notes.

Comparative information is re-presented to exclude the results of discontinued

operations.

The Ice Cream business met the criteria to be classified as held for distribution in

December 2025, following the Board’s formal approval of the demerger. At that

point, the distribution was considered highly probable and the internal separation

of the Ice Cream territories had been completed, meaning the business was

available for distribution in its current condition. As a former reportable segment

and major line of business, all Ice Cream activities have been treated as

discontinued operations in both current and comparative periods.

In line with IFRS 5, we have disclosed separately in the income statement,

statement of comprehensive income and cash flow statement results arising from

continuing and discontinued operations. 2023 and 2024 comparatives have been

re-presented on the same basis. There has been no change to the 2023 and

2024 balance sheet related amounts, including where balance sheet line item

reconciliations have been disclosed within the notes. Further details and a

breakdown of discontinued operations are provided in note 21.

CLIMATE CHANGE

In preparing these consolidated financial statements, we have considered the

impact of both physical and transition climate change risks, and any planned

mitigations, on the current valuation of our assets and liabilities. We have

identified risks and opportunities that could in the future be material to our

business, for example carbon tax or land use regulations. Where possible we

have performed quantitative assessments of these risks and opportunities based

on various scenarios for the years 2030, 2039 and 2050. These potential

financial impacts are based on high-level quantitative assessments and do not

include any assumptions on the impact of actions that we would undertake to

mitigate against these climate-related risks. Therefore, these quantifications do

not represent any type of financial forecast and thus are not directly incorporated

into any projections of long-term cash flows.

To determine if there is a material impact on the financial reporting judgements and

estimates as of the reporting period, we have reviewed each balance sheet line item

and identified those line items that have the potential to be significantly impacted by

climate-related risks and our plans to mitigate against these risks. Those line items

that have the potential to be significantly impacted have then been reviewed in detail

to confirm:

■that the growth rates and projected cash flows, used in assessing whether our

goodwill and indefinite-life intangibles are impaired, are consistent with our climate-

related risk assumptions and the actions we are taking to mitigate against those

risks; and

■that the useful lives of our property, plant and equipment are appropriate given the

potential physical and obsolescence risks associated with climate change and the

actions we are taking to mitigate against those risks.

In addition, it should be noted that climate-related risks could affect the financial

position of our defined benefit pension plan assets. The Trustees operate

diversified investment strategies and are continuously assessing investment

risks. The Trustees consider climate risk as one of the key investment risks and

are continually evolving their investments to lower the overall climate risk.

From our review of key financial statement areas, including impairment

assessments, cash flow forecasts and asset valuations, we have not identified

any material impact on financial reporting judgements or estimates as at 31

December 2025. Based on the Group’s overall financial position, its exposure to

principal risks which include climate change, and its future business forecasts,

the Group is well placed to manage these risks and meet its obligations.

Consequently, we have not identified any significant impact from climate‑related

risks on the Group’s going concern assessment or on its viability over the next

three years.

For many years, Unilever has driven an ambitious sustainability agenda. In 2024,

we launched an updated business strategy focusing on resource allocation,

accelerating long-term priorities and delivering systemic impact. Delivery of our

strategy is supported by our Climate Transition Action Plan (CTAP), which

outlines our mitigation, adaptation and advocacy actions to address climate-

related risks. The CTAP is being reviewed in 2026 as a result the demerger of Ice

Cream and to consider impacts beyond 2030. The costs and benefits of existing

actions are embedded into the cost structures of the Business Groups and

therefore are not all separately identifiable. None of these actions have

significantly impacted the value of the Group’s assets or their useful lives, and

while there is still much to do, our aim is to continue to reduce our exposure to

climate-related risks without impacting the value of the Group’s assets. However,

we recognise that the climate emergency is intensifying, with scientific

consensus indicating that the 1.5°C threshold has now been reached, and that

governments are responding with increasingly urgent and science-aligned policy

targets. We will continue to closely monitor evolving regulatory developments

and assess any resulting implications on the valuations of our assets and

liabilities in future years.

CRITICAL ACCOUNTING ESTIMATES AND

JUDGEMENTS

The preparation of financial statements requires management to make estimates and

judgements in the application of accounting policies that affect the reported amounts

of assets, liabilities, income and expenses. Actual results may differ from these

estimates. Estimates and judgements are continuously evaluated and are based on

historical experience and other factors, including expectations of future events that

are believed to be reasonable. Revisions to accounting estimates are recognised in

the period in which the estimate is revised and in any future period affected.

The following estimate is considered by management to have the most significant risk

of causing a material adjustment to the carrying amounts of assets and liabilities

within the next financial year:

■Measurement of defined benefit obligations – the valuations of the Group’s

defined benefit pension plan obligations are dependent on a number of

assumptions. These include discount rates, inflation and life expectancy of

scheme members. Details of these assumptions and sensitivities are in note

4B.

The following judgements are those that management believe have the most

significant effect on the amounts recognised in the Group’s financial statements:

■Utilisation of tax losses and recognition of other deferred tax assets – the Group

operates in many countries and is subject to taxes in numerous jurisdictions.

Management uses judgement to assess the recoverability of tax assets such as

whether there will be sufficient future taxable profits to utilise losses. See note 6B.

■Likelihood of occurrence of provisions and contingent liabilities – events can occur

where there is uncertainty over future obligations. Judgement is required to

determine if an outflow of economic resources is probable, or possible but not

probable. Where it is probable, a liability is recognised and further judgement is

used to determine the level of the provision. Where it is possible but not probable,

further judgement is used to determine if the likelihood is remote, in which case no

disclosures are provided; if the likelihood is not remote then judgement is used to

determine the contingent liability disclosed. Unilever does not have provisions and

contingent liabilities for the same matters. External advice is obtained for any

material cases. See notes 6A, 19 and 20.

■Non-cash distribution to owners – the demerger of the Ice Cream business was

executed through a distribution of shares in The Magnum Ice Cream Company

(TMICC) to Unilever shareholders on 6 December 2025. A liability for the non-cash

distribution was recognised when the distribution was authorised and no longer at

the Group’s discretion, measured at the fair value of the assets to be distributed at

that date. The distribution was settled on completion of the demerger, at which

point the disposal group was derecognised. Judgement was required in

determining the fair value of the Ice Cream business at the distribution date for the

purpose of recognising the non-cash dividend in accordance with IFRIC 17

Distributions of Non-cash Assets to Owners. Management determined fair value

with reference to the TMICC share price over a five-day period following listing.

The resulting non-cash gain is recognised within profit or loss, within the result

from discontinued operations. See note 21.

■Accounting for the retained stake in TMICC – management applied judgement in

determining that Unilever does not hold significant influence over TMICC, and

therefore TMICC is not an associate requiring accounting under the equity method.

Whilst it is presumed that significant influence does not exist with a holding of less

than 20 percent, careful consideration was given to the representation of Unilever

on the board of TMICC, and material ongoing transactions between Unilever and

TMICC.

ACCOUNTING DEVELOPMENTS ADOPTED BY THE GROUP

Recent accounting developments adopted by the Group

All new standards or amendments issued by the IASB and UK Endorsement Board that were effective by 1 January 2025, were either not applicable or not material to

the Group.

New standards, amendments and interpretations of existing standards that are not yet effective and have

not been early adopted by the Group

The following standards have been released but are not yet adopted by the Group. The Group is currently assessing their impact on the financial results and position

of the Group.

Applicable standard	Key requirements or changes in accounting policy
Amendments to IFRS 9 and IFRS 7 ‘The Classification and Measurement of Financial instruments’ Effective from 1 January 2026	In May 2024, the International Accounting Standards Board (IASB) amended IFRS 7 and IFRS 9, which includes clarifications on recognition and derecognition dates of certain financial assets and liabilities, including exceptions for liabilities settled through electronic cash transfer systems.
IFRS 18 Presentation and Disclosure in Financial Statements Effective 1 January 2027	IFRS 18 will replace IAS 1 Presentation of Financial Statements. The amendment impacts presentation and disclosure of the consolidated income statement with new defined categories being operating, investing and financing to provide a consistent structure. Disclosures about Management-defined Performance Measures (MPMs) (i.e. certain non-GAAP measures) will have to be disclosed in the financial statement with reconciliations to GAAP measures. The new standard will also provide guidance on grouping of information (aggregation/disaggregation). The Group has commenced its assessment of IFRS 18 Presentation and Disclosure in Financial Statements (effective 1 January 2027), with the main impacts expected on the presentation of the consolidated income statement and the disclosure of Management Performance Measures. The standard will be applied from its mandatory effective date of 1 January 2027. Final impact assessment and transition activities will take place during 2026.

All other new standards or amendments that are not yet effective that have been issued by the IASB are not applicable or material to Unilever.