Accounting

Goodwill and Other Intangible Assets Goodwill and indefinite-lived intangible assets are not amortized, but are evaluated for impairment annually or more often if indicators of a potential impairment are present. Our annual impairment testing of goodwill is performed separately from our impairment testing of indefinite-lived intangible assets. We have acquired brands that have been determined […]

Inventory Valuation Inventories are valued at the lower of cost or net realizable value. Product- related inventories are maintained on the first-in, first-out method. The cost of spare part inventories is maintained using the average-cost method. Property, Plant and Equipment Property, plant and equipment is recorded at cost reduced by accumulated depreciation. Depreciation expense is

Investments The Company holds minor equity investments in certain companies over which we exert significant influence, but do not control the financial and operating decisions. These are accounted for as equity method investments. Other equity investments that are not controlled, and over which we do not have the ability to exercise significant influence, and for

Cash Flow Presentation The Consolidated Statements of Cash Flows are prepared using the indirect method, which reconciles net earnings to cash flows from operating activities. Cash flows from foreign currency transactions and operations are translated at monthly exchange rates for each period. Cash flows from hedging activities are included in the same category as the

Currency Translation Financial statements of operating subsidiaries outside the U.S. generally are measured using the local currency as the functional currency. Adjustments to translate those statements into U.S. dollars are recorded in Other comprehensive income (OCI). For subsidiaries operating in highly inflationary economies, the U.S. dollar is the functional currency. Re- measurement adjustments for financial

Cost of Products Sold Cost of products sold is primarily comprised of direct materials and supplies consumed in the manufacturing of product, as well as manufacturing labor, depreciation expense and direct overhead expenses necessary to acquire and convert the purchased materials and supplies into finished products. Cost of products sold also includes the cost to

Revenue Recognition Our revenue is primarily generated from the sale of finished product to customers. Those sales predominantly contain a single performance obligation and revenue is recognized at a single point in time when ownership, risks and rewards transfer, which can be on the date of shipment or the date of receipt by the customer.

SUPPLEMENTAL DISCLOSURE Cash payments for interest $ 531 $ 434 $ 497 Cash payments for income taxes 3,822 3,550 3,064 Includes early extinguishment of debt costs of $512 in 2021. (1) (1) See accompanying Notes to Consolidated Financial Statements. The Procter & Gamble Company 43 Notes to Consolidated Financial Statements NOTE 1 SUMMARY OF SIGNIFICANT

Consolidated Statements of Earnings Amounts in millions except per share amounts; Years ended June 30 2021 2020 2019 NET SALES $ 76,118 $ 70,950 $ 67,684 Cost of products sold 37,108 35,250 34,768 Selling, general and administrative expense 21,024 19,994 19,084 Goodwill and indefinite-lived intangible impairment charges — — 8,345 OPERATING INCOME 17,986 15,706 5,487

Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of The Procter & Gamble Company and subsidiaries (the “Company”) as of June 30, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In