the financial statements as a whole. Accounting policies, critical accounting estimates and judgements specific to a note are included in the note to

which they relate. Furthermore, the section details new accounting standards, amendments and interpretations, that the group has adopted in the

The consolidated financial statements are prepared in accordance

with IFRS® Accounting Standards (IFRSs) adopted by the UK (UK-

adopted International Accounting Standards) and IFRSs, as issued by

the International Accounting Standards Board (IASB), including

interpretations issued by the IFRS Interpretations Committee. IFRS

as adopted by the UK differs in certain respects from IFRS as issued

by the IASB. The differences have no impact on the group’s

consolidated financial statements for the years presented. The

consolidated financial statements are prepared on a going concern

basis under the historical cost convention, unless stated otherwise in

The preparation of financial statements in conformity with IFRS

requires management to make estimates and assumptions that affect

the reported amounts of assets and liabilities, the disclosure of

contingent assets and liabilities at the date of the financial

statements, and the reported amounts of revenues and expenses

during the year. Actual results could differ from those estimates.

Management prepared 18-month cash flow forecasts which reflect

severe but plausible downside scenarios taking into consideration the

group's principal risks. In the base case scenario, management included

assumptions to deliver positive operating leverage, with organic profit

growth ahead of organic net sales growth. In light of the ongoing

geopolitical volatility, the base case outlook and severe but plausible

downside scenarios incorporated considerations for a prolonged global

recession, supply chain disruptions, higher inflation and further

geopolitical deterioration. Even under these scenarios, the group’s

liquidity is still expected to remain strong. Mitigating actions, should

they be required, are all within management’s control and could

include reductions in discretionary spending such as acquisitions and

capital expenditure, lower level of marketing spend and investment in

maturing stock, as well as a temporary suspension or reduction in

dividend to shareholders in the next 12 months, or drawdowns on

committed facilities. Having considered the outcome of these

assessments, the Directors are comfortable that the group (and

company) is a going concern for at least 12 months from the date of

signing the group's consolidated financial statements.

The consolidated financial statements include the results of the

company and its subsidiaries together with the group’s attributable

share of the results of associates and joint ventures. A subsidiary is an

entity controlled by Diageo plc. The group controls an investee when it

is exposed, or has rights, to variable returns from its involvement with

the investee and has the ability to affect those returns through its

power over the investee. Where the group has the ability to exercise

joint control over an entity but has rights to specified assets and

obligations for liabilities of that entity, the entity is included on the

basis of the group’s rights over those assets and liabilities.

Items included in the financial statements of the group’s subsidiaries,

associates and joint ventures are measured using the currency of the

primary economic environment in which each entity operates (its

functional currency). The consolidated financial statements are

presented in US dollar, which is the functional currency of the parent

company, Diageo plc. The functional currency of Diageo plc is

determined by using management judgement that considers the parent

company as an extension of its subsidiaries.

The income statements and cash flows of non-US dollar entities are

translated into US dollar at weighted average rates of exchange,

except for subsidiaries in hyperinflationary economies that are

translated with the closing rate at the end of the year and for

substantial transactions that are translated at the rate on the date of

the transaction. Exchange differences arising on the retranslation to

closing rates are taken to the exchange reserve.

Assets and liabilities are translated at the relevant year end closing

rates. Exchange differences arising on the retranslation at closing rates

of the opening balance sheets of non-US dollar entities are taken to

the exchange reserve, as are exchange differences arising on foreign

currency borrowings and financial instruments designated as net

investment hedges, to the extent that they are effective. Tax charges

and credits arising on such items are also taken to the exchange

reserve. Gains and losses accumulated in the exchange reserve are

recycled to the income statement when the foreign operation is sold.

Other exchange differences are taken to the income statement.

Transactions in foreign currencies are recorded at the rate of exchange

The principal foreign exchange rates used in the translation of financial

statements for the three years ended 30 June 2025, expressed in

sterling and euros per $1, were as follows:


	2025	2024	2023
Sterling
Income statement and cash flows(1)	0.77	0.80	0.83
Assets and liabilities(2)	0.73	0.79	0.79
Euro
Income statement and cash flows(1)	0.92	0.93	0.96
Assets and liabilities(2)	0.85	0.93	0.93

The group uses foreign exchange hedges to mitigate the effect of

exchange rate movements. For further information, see note 16.

(e) Critical accounting estimates and judgements

Details of critical estimates and judgements which the Directors

consider could have a significant impact on the financial statements

are set out in the related notes as follows:

•Taxation – management judgement whether a provision is required

and estimate of amount of corporate tax payable or receivable, the

recoverability of deferred tax assets and expectation on manner of

recovery of deferred taxes – pages 163 and 197.

•Brands, goodwill, other intangibles and contingent considerations –

management judgement whether the assets and liabilities are to be

recognised and synergies resulting from an acquisition. Management

judgement and estimate are required in determining future cash

flows and appropriate applicable assumptions to support the

intangible asset and contingent consideration value – pages 163 and

•Post-employment benefits – management judgement whether a

surplus can be recovered and management estimate in determining

the assumptions in calculating the liabilities of the funds – page 176.

•Contingent liabilities and legal proceedings – management

judgement in assessing the likelihood of whether a liability will arise

and an estimate to quantify the possible range of any settlement;

and significant unprovided tax matters where maximum exposure is

The group applied hyperinflationary accounting for its operations in

The group applies hyperinflationary accounting for its operations in

Ghana starting from 1 July 2023. Hyperinflationary accounting needs to

be applied as if Ghana had always been a hyperinflationary economy,

hence, as per Diageo’s accounting policy choice, the differences

between equity at 30 June 2023 as reported and the equity after the

restatement of the non-monetary items to the measuring unit current

at 30 June 2023 were recognised in retained earnings.

The group’s consolidated financial statements include the results and

financial position of its operations in hyperinflationary economies

restated to the measuring unit current at the end of each period, with

hyperinflationary gains and losses in respect of monetary items being

reported in finance income and charges. Comparative amounts

presented in the consolidated financial statements are not restated.

When applying IAS 29 on an ongoing basis, comparatives in stable

currency are not restated and the effect of inflating opening net assets

to the measuring unit current at the end of the reporting period is

presented in other comprehensive income. The movement in the

publicly available official price index for the year ended 30 June 2025

was 35% (2024 – 72%; 2023 – 38%) in Türkiye and 16% (2024 – 23%) in

Ghana. The inflation rate used by the group for Venezuela is provided

by an independent valuer because no reliable, officially published rate

is available. Movement in the price index for the year ended 30 June

2025 was 171% (2024 – 77%; 2023 – 382%) in Venezuela.

During the year ended 30 June 2024, developments in Venezuela led

management to change its estimate for the exchange rate of VES/$ to

be the official exchange rate published by Bloomberg. Figures for the

year ended 30 June 2024 and 30 June 2025 show the results of the

Venezuelan operation consolidated at the official closing exchange rate

(g) New accounting standards and interpretations

The following accounting standards and amendments to standards,

issued by the IASB including those endorsed by the UK, were adopted

by the group from 1 July 2024 with no material impact on the group’s

consolidated results, financial position or disclosures:

•Amendments to IAS 1 – Classification of Liabilities and Non-current

•Amendments to IFRS 16 – Lease Liability in a Sale and Leaseback

The group has adopted amendments to IAS 7 and IFRS 7 –

Supplier Finance Arrangements and presents the relevant

The following amendments issued by the IASB have been endorsed by

the UK and have not yet been adopted by the group, which are not

expected to have material impact on the group's consolidated results

•Amendments to IAS 21 – Lack of exchangeability (effective from the

•Amendments to IFRS 9 and IFRS 7 – Amendments to the Classification

and Measurement of Financial Instruments (effective from the year

The impact assessment of IFRS 18 – Presentation and disclosure of

financial statements, which will become effective in the consolidated

group financial statements from the year ending 30 June 2028 – subject

There are a number of other standards, amendments and

clarifications to IFRSs, effective in future years, which are not

expected to significantly impact the group’s consolidated results or

The impact of climate change assessment and greenhouse gas emission

targets for Diageo's direct operations (Scope 1 and 2) for 2030 have

been considered as part of the assessment of estimates and

judgements in preparing the group's consolidated financial statements.

We integrate climate risk into our enterprise risk management

processes, within our principal risk factors. This is an integral part of

our strategic and business continuity planning.

The climate change scenario analyses performed in 2025 – conducted in

line with TCFD recommendations (a Moderate Warming’ Scenario (RCP

4.5) and a ‘Severe Warming Scenario’ (RCP 8.5)) – identified no

material financial impact to these financial statements.

The following considerations were made in respect of the financial

•The impact of climate change on factors like residual values, useful

lives and depreciation methods that determine the carrying value of

•The impact of climate change on forecasts of cash flows used

(including forecast depreciation in line with capital expenditure

plans) in impairment assessments for the value-in-use of non-current

•The impact of climate change on post-employment assets.