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General information / summary of general accounting policies (Policies)
 12 Months Ended
Dec. 31, 2023
Accounting Policies [Abstract]  
Basis of preparation Basis of preparation
The accompanying Consolidated Financial Statements are stated in millions of euros unless indicated otherwise.
The accompanying Consolidated Financial Statements have been prepared in conformity with US GAAP.
Use of estimates Use of estimates
The preparation of our Consolidated Financial Statements in conformity with US GAAP requires management to
make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities on the balance sheet dates, and the reported amounts of net sales and costs for the
reported periods. The inputs into our estimates and assumptions consider economic implications including supply
chain constraints, inflation and uncertainty in the macroeconomic environment. We believe that the critical accounting
estimates and assumptions are appropriate. ASML will continue to monitor the impacts of economic implications and
incorporate them into accounting estimates. Actual results could differ from those estimates. We evaluate our
estimates on a regular basis and we base our estimates on historical experience and on various other assumptions
that we believe to be reasonable under the circumstances. Actual results may differ from these estimates if the
assumptions prove incorrect. To the extent there are material differences between actual results and these estimates,
our future results could be materially and adversely affected.
We believe that the accounting policies described below require us to make significant judgments and estimates in
the preparation of our Consolidated Financial Statements. Our most critical accounting estimates include:
•Revenue recognition (see Note 2 Revenue from contracts with customers)
•Recoverability of deferred tax assets for capitalized R&D expenditures (see Note 21 Income taxes)
Principles of consolidation Principles of consolidation
The Consolidated Financial Statements include the Financial Statements of ASML Holding NV and all of its
subsidiaries. Subsidiaries are all entities over which ASML controls the financial and operating activities, generally
accompanying a shareholding of more than 50.0% of the outstanding voting rights. Subsidiaries are fully consolidated
from the date on which control is obtained by ASML. All intercompany transactions, balances and unrealized results
on transactions with subsidiaries are eliminated. We also assess if we are the primary beneficiary of, and thus should
consolidate, any variable interest entity (VIE).
Foreign currency translation Foreign currency translation
The financial information for subsidiaries with a functional currency outside the euro-zone is measured using a mix of
local currencies or the euro as the functional currency. The Financial Statements of those foreign subsidiaries with a
functional currency different than the euro are translated into euros in the preparation of ASML’s Consolidated
Financial Statements. Assets and liabilities are translated into euros at the exchange rate on the respective balance
sheet dates and income and costs are translated into euros based on the average exchange rate for the
corresponding period. The resulting translation adjustments are recorded directly in shareholders’ equity.
New US GAAP accounting pronouncements adopted and issued but not adopted New US GAAP accounting pronouncements adopted
During 2023, there were no new US GAAP accounting pronouncements that were adopted which have a material
impact on our Consolidated Financial Statements.
New US GAAP accounting pronouncements issued but not adopted
For 2023, there are no new US GAAP accounting pronouncements issued which have not yet been adopted and are
expected to have a material impact on our Consolidated Financial Statements.
Revenue from contracts with customers Accounting Policy
We measure revenue based on the consideration specified in the contracts with our customers, adjusted for any
significant financing components, and excluding any taxes collected on behalf of third parties. We recognize revenue
when we satisfy a performance obligation by transferring control over a good or service to our customer. We bill our
customers for, and recognize as revenue, charges for shipping and handling costs.
Depending on the contract, we obtain a right to payment for our systems through a combination of either a
reservation of a production slot or upon delivery of our systems, with the remaining portion upon final acceptance of
our systems. Right to payment for our service and field options occurs upon shipment or completion of the service
unless described otherwise. The payment is typically due 15-45 days after the aforementioned events. Our contracts
typically include cancellation penalties that provide economic protection from the risk of customer cancellation. The
costs related to our sales are recognized as cost of sales.
We generate revenue from the sale of integrated patterning solutions for the semiconductor industry, which mainly
consist of systems, system-related options and upgrades, other holistic lithography solutions and customer services.
The main portion of our net sales is derived from volume purchase agreements with our customers that have multiple
performance obligations, which mainly include the sales of our systems, system-related options, installation, training
and extended and enhanced warranties. In our volume purchase agreements we offer customers discounts in the
normal course of sales negotiations. As part of these volume purchases agreements, we may also offer free goods or
services and credits that can be used towards future purchases. Occasionally, systems, with the related extended
and enhanced warranties, installation and training services, are ordered individually. Our sales agreements do not
include a right of return for any reason other than not meeting the agreed upon specifications.
We account for individual goods and services as separate and distinct performance obligations, including the free or
discounted goods or services, if a product or service is separately identifiable from other items and if a customer can
benefit from it on its own or with other resources that are readily available to the customer. Options to buy goods or
services in addition to the purchase commitment are assessed to determine if they provide a material right to the
customer that they would not have received if they had not entered into this contract. Each option to buy additional
goods or services provided at a discount from the standalone selling price is considered a material right, for which the
likelihood that the option will be exercised is evaluated based on the customer roadmap and their requirements.
The consideration paid for our performance obligations is typically fixed. However, most of our volume purchase
agreements with customers contain some component of variable consideration, typically dependent on the final
volume of systems ordered by the customer or the system performance. Variable consideration is estimated at
contract inception for each performance obligation based on communication with the customer to understand their
requirements and roadmap. This is subsequently updated each quarter, using either the expected value method or
most likely amount method, whichever is determined to best predict the consideration to be collected from the
customer. Variable consideration is only included in the transaction price if it is considered probable that a significant
revenue reversal will not occur.
In certain scenarios when entering into a volume purchase agreement, free goods or services are provided directly or
through a voucher that can be used on future contracts. Consideration from the contract will be allocated to these
performance obligations and revenue recognized when control transfers based on the nature of the goods or services
provided.
As a practical expedient, we do not record a significant financing component when we expect, at contract inception,
that the period between the transfer of the products or services to the customer and customer payment for the
products or services will be one year or less. In addition most of our contracts require our customers to pay a down
payment on systems to be shipped. We do not record a significant financing component for down payments as the
timing difference between when the consideration is paid and when the system is transferred to the customer arises
from reasons other than financing.
The total consideration of the contract is allocated between all distinct performance obligations in the contract based
on their standalone selling prices. The standalone selling prices are determined based on other standalone sales that
are directly observable, when possible. However, for the majority of our performance obligations these are not
available. If no directly observable evidence is available, the standalone selling price is determined using the adjusted
market assessment approach, which requires judgment and is based on multiple factors including, but not limited to,
historical pricing practices and discounting trends for products and services.
For options to buy goods or services that are considered a material right, the discount offered from the standalone
selling price will be allocated from the consideration of the other goods and services in the contract if it is determined
the customer will exercise the option to buy, adjusted for the likelihood. Revenue will be recognized in line with the
nature of the related goods or services. If it is subsequently determined the customer will not exercise the option to
buy, or the option expires, revenue will be recognized.
Occasionally we enter into bill-and-hold transactions where we invoice a customer for a system that is ready for
delivery but not shipped to the customer until a later date, based on customer’s request. Transfer of control is
determined to have occurred only when there is a substantive reason for the arrangement, the system is separately
identified as belonging to the customer, the good has been accepted by the customer and is ready for delivery, and
we do not have the ability to direct the use of the system.
We generate revenue from lessor agreements, which we classify as a sales-type lease when the lease meets any of
the following criteria at lease commencement: 
•The lease transfers ownership of the underlying asset to the lessee by the end of the lease term;
•The lease grants the lessee an option to purchase the underlying asset, that the lessee is reasonably certain to
exercise;
•The lease term is for the major part of the remaining economic life of the underlying asset. However, if the
commencement date falls at or near the end of the economic life of the underlying asset, this criterion shall not be
used for purposes of classifying the lease;
•The present value of the sum of the lease payments and any residual value guaranteed by the lessee that is not
already reflected in the lease payments equals or exceeds substantially all of the fair value of the underlying asset;
or
•The underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at
the end of the lease term.
For sales-type leases where substantially all the risks and rewards incidental to ownership of an asset are transferred
to the lessee, revenue is recognized at commencement of the lease. If material, the difference between the gross
finance receivable and the present value of the minimum lease payments is initially recognized as unearned interest
and presented as a deduction to the gross finance receivable. Interest income is recognized in the Consolidated
Statements of Operations over the term of the lease contract using the effective interest method. 
Leases that are not a sales-type lease are operating lease arrangements. If we have offered the customer an
operating lease arrangement, the system is included in Property, plant and equipment upon commencement of the
lease. Revenue from operating lease arrangements is recognized in the Consolidated Statements of Operations on a
straight-line basis over the term of the lease contract.
Goods or services
Nature, timing of satisfying the performance obligations, and significant
payment terms
New systems (established
technologies)
New systems sales include i-line, KrF, ArF, ArFi and NXE-related systems, along with
the related factory options ordered with the base system, as well as metrology and
inspection systems.
Prior to shipment, the majority of our systems undergo a Factory Acceptance Test (FAT)
in our cleanroom facilities, effectively replicating the operating conditions that will be
present on the customer’s site, in order to verify whether the system meets its standard
specifications and any additional technical and performance criteria agreed with the
customer. 
A system undergoing FAT is shipped only after all contractual specifications are met or
discrepancies from agreed upon specifications are waived and customer sign-off is
received for delivery. Each system’s performance is re-tested through a Site
Acceptance Test (SAT) after installation at the customer site. We have never failed to
successfully complete installation of a system at a customer’s premises; therefore,
acceptance at FAT is considered to be proven for established technologies with a
history of successful customer acceptances at SAT (equal or better than FAT).
Transfer of control and recognition of revenue of a system undergoing a FAT and for
which customer acceptance at FAT is proven, will occur upon delivery of the system.
Transfer of control and recognition of revenue of a system not undergoing a FAT or for
which customer acceptance at FAT is not proven, will occur after successful installation
upon customer acceptance of the system at SAT.
New system sales do not meet the requirements for over time revenue recognition
because our customers do not simultaneously receive and consume the benefits
provided by our performance, or control the asset throughout any stage of our
production process, as well as the systems are considered to have alternative use.
Goods or services
Nature, timing of satisfying the performance obligations, and significant
payment terms
Used systems
We have no repurchase commitments in our general sales terms and conditions,
however we occasionally repurchase systems that we previously manufactured and
sold, in order to refurbish and resell the system to a different customer. This repurchase
decision is mainly driven by market demand expressed by other customers.
Transfer of control of a used system, and recognition of revenue, follow the same logic
as for our “New systems (established technologies)”.
Field upgrades and options
(system enhancements)
Field upgrades and options mainly relate to goods and services that are delivered for
systems already installed in the customer factories. Certain upgrades require significant
installation efforts, enhancing an asset the customer controls, therefore resulting in
transfer of control over the period of installation, measured using the cost incurred
method which is estimated using labor hours, as this best depicts the satisfaction of our
obligation in transferring control. For the options and other upgrades for which the
customer receives and consumes the benefit at the moment of delivery, the transfer of
control and recognition of revenue will occur upon delivery.
As long as we are not able to make a reliable estimate of the total efforts needed to
complete the upgrade, we only recognize revenue to cover costs incurred. Margin will
be realized at the earlier of us being able to make a reliable estimate or completion of
the upgrade.
New product introduction
We sell new products and services, which are evolutions of our existing technologies. If
installation is determined not to be a separate performance obligation or if there is not a
sufficient established history of acceptance on FAT, the product is determined to be a
“new product introduction”.
New product introductions are typically newly developed options to be used within our
systems. Transfer of control and revenue recognition for new product introductions
occurs after successful installation and customer acceptance at SAT. Once there is an
established history of successful installation and customer acceptance, revenue will be
recognized consistent with other systems and goods after transfer of control.
Installation
Installation is provided within the selling price of a system. Installation is considered to
be distinct as it does not significantly modify the system being purchased and the
customer or a third party could be capable of performing the installation themselves, if
desired. Transfer of control takes place over the period of installation from delivery
through SAT, measured on a straight-line basis, as our performance is satisfied evenly
over this period of time. Installation is not considered to be distinct when recognition of
revenue related to a system occurs upon customer acceptance of the system at SAT
after installation is complete.
Warranties
We provide standard warranty coverage on our systems for 12 months, providing labor
and non-consumable parts necessary to repair our systems during these warranty
periods. These standard warranties cannot be purchased and do not provide a service
in addition to the general assurance the system will perform as promised. As a result,
no revenue is allocated to these standard warranties.
Both the extended and enhanced warranties on our systems are accounted for as a
separate performance obligation, with transfer of control taking place over the warranty
period, measured on a straight-line basis, as this is a stand-ready obligation.
Goods or services
Nature, timing of satisfying the performance obligations, and significant
payment terms
Time-based licenses and
related service
Time-based licenses relate to software licenses and the related service which are sold
for a period of time. The licenses and the related service are not considered to be
individually distinct as the support services are integral to the customer’s ability to
continue to use the software license in the rapidly changing technological environment.
The transfer of control takes place over the license term, measured on a straight-line
basis, as our performance is satisfied evenly over this period of time. Payments are
generally made in installments throughout the license term.
Application projects
Application projects are node transition and consulting projects which at times may be
provided as free service within a volume purchase agreement. Measuring satisfaction of
this performance obligation is performed through an input method based on the labor
hours expended relative to the estimated total labor hours as this best depicts the
transfer of control of these kind of services.
Service contracts
Service contracts are entered into with our customers to support our systems used in
their ongoing operations during the systems life cycle, typically in the form of full-service
agreements, limited manpower agreements, other labor agreements, parts availability or
parts usage agreements. These services are for a specified period of time and typically
have a fixed price. Control transfers over this period of time, measured on a straight-line
basis, as these are stand-ready obligations. For service contracts where the price is not
fixed, the transaction price has a variable component that is based on the performance
of the system.
Billable parts and labor
Billable labor represents maintenance services to our systems installed in the
customer’s factories while in operation, through purchase orders from our customer.
Control over these services is transferred to the customer upon receipt of customer
sign-off.
Billable parts represent spare parts including optical components relating to our
systems installed in the customer’s factories while in operation, through purchase
orders from our customer.
Billable parts can be:
•Sold as direct spare parts, for which control transfers point in time upon delivery; or
•Sold as part of maintenance services, where control transfers point in time upon
receipt of customer sign-off.
Field projects (relocations)
Field projects represent mainly relocation services. Measuring satisfaction of this
performance obligation is performed through an input method based on the labor hours
expended relative to the estimated total labor hours as this best depicts the transfer of
control of our service.
OnPulse Maintenance
OnPulse maintenance services are provided over a specified period of time on our light
source systems. Payment is determined by the number of pulses counted from each
light source system, which is variable. Invoicing is monthly based on the pulses
counted. Revenue is recognized in line with invoicing using the practical expedient in
ASC 606-10-55-18.
Contract assets and liabilities
The contract assets relate to our right to a consideration in exchange for goods or services delivered, when that right
is conditional on something other than the passage of time. The contract assets are transferred to the receivables
when the receivables become unconditional. The contract liabilities primarily relate to remaining performance
obligations for which consideration has been received for systems not yet recognized in revenue, as well as deferred
revenue from system shipments, based on the allocation of the consideration to the related performance obligations
in the contract.
The majority of our customer contracts result in both asset and liability positions. At the end of each reporting period,
these positions are netted on a contract basis and presented as either an asset or a liability in the Consolidated
Balance Sheets. Consequently, a contract balance can change between periods from a net contract asset balance to
a net contract liability balance in the balance sheet.
Remaining performance obligations
Our customers generally commit to purchase systems, service, or field options through separate sales orders and
service contracts. Typically the terms and conditions of these sales orders come from volume purchase agreements
with our customers which can cover up to 5 years. The revenues for each committed performance obligation are
estimated based on the terms and conditions agreed through the volume purchase agreements.
When revenues will be recognized is mainly dependent on when systems are delivered or installed, as well as when
service projects and field upgrades are performed and completed. All of which is estimated based on contract terms
and communication with our customers, including the customer facility readiness to take delivery of our goods or
services. The volume purchase agreements may be subject to modifications, impacting the amount and timing of
revenue recognition for the anticipated revenues.
Revenue from lessor agreements We generate revenue from lessor agreements, which we classify as a sales-type lease when the lease meets any of
the following criteria at lease commencement: 
•The lease transfers ownership of the underlying asset to the lessee by the end of the lease term;
•The lease grants the lessee an option to purchase the underlying asset, that the lessee is reasonably certain to
exercise;
•The lease term is for the major part of the remaining economic life of the underlying asset. However, if the
commencement date falls at or near the end of the economic life of the underlying asset, this criterion shall not be
used for purposes of classifying the lease;
•The present value of the sum of the lease payments and any residual value guaranteed by the lessee that is not
already reflected in the lease payments equals or exceeds substantially all of the fair value of the underlying asset;
or
•The underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at
the end of the lease term.
For sales-type leases where substantially all the risks and rewards incidental to ownership of an asset are transferred
to the lessee, revenue is recognized at commencement of the lease. If material, the difference between the gross
finance receivable and the present value of the minimum lease payments is initially recognized as unearned interest
and presented as a deduction to the gross finance receivable. Interest income is recognized in the Consolidated
Statements of Operations over the term of the lease contract using the effective interest method. 
Leases that are not a sales-type lease are operating lease arrangements. If we have offered the customer an
operating lease arrangement, the system is included in Property, plant and equipment upon commencement of the
lease. Revenue from operating lease arrangements is recognized in the Consolidated Statements of Operations on a
straight-line basis over the term of the lease contract.
Cash and cash equivalents Accounting Policy
Cash and cash equivalents consist primarily of highly liquid investments, such as bank deposits, deposits with
governments and government-related bodies, money market funds and bank accounts readily convertible to known
amounts of cash with insignificant interest rate risk and original maturities to the entity holding the investments 3
months or less at the date of acquisition.
Short-term investments Investments with original maturities at the date of acquisition greater than 3 months and 1 year or less are presented
as short-term investments. Fair value changes in these investments, which are not temporary, are recognized in the
Consolidated Statements of Operations. Short-term investments have insignificant interest rate risk.
Accounts receivable, net Accounting Policy
Accounts receivable are measured at fair value and are subsequently measured at amortized cost, less allowance for
credit losses, if material. The carrying amount of the accounts receivable approximates the fair value. We perform
ongoing credit evaluations on our customers’ financial condition. We periodically review whether an allowance for
credit losses is needed by considering factors such as historical payment experience, credit quality, aging of the
accounts receivable balances, expected lifetime losses, and current economic conditions that may affect a
customer’s ability to pay.
Allowance for doubtful accounts We perform
ongoing credit evaluations on our customers’ financial condition. We periodically review whether an allowance for
credit losses is needed by considering factors such as historical payment experience, credit quality, aging of the
accounts receivable balances, expected lifetime losses, and current economic conditions that may affect a
customer’s ability to pay.
Transfers and servicing of financial assets When entering into arrangements to sell our receivable, we derecognize the receivable only when meeting the
derecognition criteria. The criteria require isolation from the seller, granting the buyer the right to pledge or exchange
the receivables, and legal transfer of control over the receivable.
Finance receivables, net Accounting Policy
Finance receivables consist of receivables in relation to sales-type leases. We perform ongoing credit evaluations of
our customers’ financial condition. We periodically review whether an allowance for credit losses is needed by
considering factors such as historical payment experience, credit quality, the aging of the finance receivables
balances, expected lifetime losses, and current economic conditions that may affect a customer’s ability to pay.
Allowance for credit loss We perform ongoing credit evaluations of
our customers’ financial condition. We periodically review whether an allowance for credit losses is needed by
considering factors such as historical payment experience, credit quality, the aging of the finance receivables
balances, expected lifetime losses, and current economic conditions that may affect a customer’s ability to pay.
Inventories, net Accounting Policy
Inventory costs are computed on a first-in, first-out basis. Our inventory values are comprised of purchased materials,
freight expenses, customs, duties, production labor and overhead. The valuation of inventory includes determining
which fixed production overhead costs should be capitalized into inventory based on the normal capacity of our
manufacturing and assembly facilities. During periods when production is below our established normal capacity
level, a portion of our fixed overhead costs are not included in the cost of inventory; instead, it is recognized as cost
of sales as incurred.
Inventory is valued at the lower of cost or net realizable value, based on assumptions about future demand and
market conditions. Valuation of inventory also requires us to establish provisions for inventory that is defective,
obsolete or in excess. We use our demand forecast to develop manufacturing plans and utilize this information to
compare against raw materials, work-in-progress and finished product levels to determine the amount of defective,
obsolete or excess inventory.
Equity method investments Accounting Policy
Equity investments over which we are able to exercise significant influence but do not control, are accounted for
using the equity method and presented on our Consolidated Balance Sheets within Equity method investments. The
difference between the cost of our investment and our proportionate share in the carrying value of the investee’s
underlying net assets as of the acquisition date is the basis difference. The basis difference is allocated to the
identifiable assets and liabilities based on their fair value as of the acquisition date (i.e. the date on which we obtain
significant influence), with the excess costs of the investment over our proportional fair value of the identifiable assets
and liabilities being equity method goodwill.
We amortize the basis difference related to the other intangible assets over the estimated remaining useful lives of
these assets that gave rise to this difference. The remaining weighted-average life of the finite-lived intangible assets
acquired is 13.1 years and is amortized using a straight-line method. In-process R&D is initially capitalized at fair value
as an intangible asset with an indefinite life. When the R&D project is complete, it is reclassified as an amortizable
purchased intangible asset and is amortized over its estimated useful life. If the project is abandoned, we will record
the full basis difference charge for the value of the related intangible asset in our Consolidated Statements of
Operations in the period of abandonment. Equity method goodwill is not amortized or tested for impairment; instead
the equity method investment is tested for impairment whenever events or changes in circumstances indicate that the
carrying value of the investment may not be recoverable.
Under the equity method, after initial recognition at cost, our Equity method investments are adjusted for our
proportionate share in the profit or loss and other comprehensive income of the investee, recognized on a one-
quarter time lag to allow for the timely preparation of financial information and presented within Profit from equity
method investments. Our proportionate share in the profit or loss of the investee is adjusted for any differences in
accounting principles and policies, basis difference adjustments and intra-entity profits. Receipt of dividends reduces
our Equity method investments, which is presented as an operating cash flow based on the nature of the
distributions.
Business combinations and divestitures Accounting Policy
Acquisitions of subsidiaries are included on the basis of the acquisition method. The cost of acquisition is measured
based on the consideration transferred at fair value, the fair value of identifiable assets distributed and the fair value of
liabilities incurred or assumed at the acquisition date (i.e. the date which we obtain control). Goodwill is capitalized as
the excess of the costs of an acquired subsidiary, net of the amounts assigned to identifiable assets acquired and
liabilities incurred or assumed. Acquisition-related costs are expensed when incurred in the period they arise or the
service is received.
Goodwill Accounting Policy
Goodwill represents the excess of the costs of an acquisition over the fair value of the amounts assigned to assets
acquired and liabilities incurred or assumed of the acquired subsidiary at the date of acquisition. Goodwill on
acquisition of subsidiaries is allocated to reporting units for the purpose of impairment testing. The allocation is made
to those reporting units that are expected to benefit from the business combination in which the goodwill arose.
Goodwill is stated at cost less accumulated impairment losses.
Goodwill is tested for impairment annually or whenever events or changes in circumstances indicate that the carrying
amount of the goodwill may not be recoverable. To determine whether it is necessary to perform the quantitative
goodwill impairment test, we perform a step-zero qualitative assessment, annually. If we determine that it is more
likely than not that the fair value of a reporting unit exceeds its carrying amount, we do not perform a quantitative
goodwill impairment test.
Intangible assets, net Accounting Policy
Intangible assets include brands, intellectual property, developed technology, customer relationships, and other
intangible assets not yet available for use. These finite-lived intangible assets are stated at cost, less accumulated
amortization and accumulated impairment losses. Amortization is calculated using the straight-line method based on
the estimated useful lives of the assets.
Finite-lived intangible assets are assessed for impairment, annually or whenever there is an indication that the balance
sheet carrying amount may not be recoverable using cash flow projections for the useful life.
The following table shows the respective useful lives for intangible assets:
Category
Estimated useful life
Brands
20 years
Intellectual property
3–10 years
Developed technology
6–15 years
Customer relationships
8–18 years
Other
2–10 years
Property, plant and equipment, net Accounting Policy
Property, plant and equipment is stated at cost, less accumulated depreciation and accumulated impairment losses.
Costs of assets manufactured by ASML include direct manufacturing costs, production overhead and interest costs
incurred for qualifying assets during the construction period. Property, plant and equipment are depreciated on a
straight-line basis in the Consolidated Statements of Operations over their estimated useful lives, except for land
which is not depreciated. 
Evaluation systems leased to our customers under an operating lease are capitalized as Property, plant and
equipment at cost and depreciated over the respective lease term. Leased assets that are returned to ASML upon
expiration of the lease term are either taken back into Property, plant and equipment as they will be used internally by
D&E or transferred back to Inventories to be reworked and sold.
The carrying values of prototypes, tooling and equipment that are intended to be sold, but first internally utilized for
more than one year for R&D purposes, are reclassified from Inventories to Property, plant and equipment and
depreciated while being internally used. When no longer required for R&D activities, the assets’ carrying value is
reclassified back to Inventories and reworked to make them ready for sale to our customers. These transfers are
reported as Net non-cash movements to/from Inventories in our Property, plant and equipment movement schedule.
Property, plant and equipment is assessed for impairment whenever there is an indication that the carrying amount
may not be recoverable using cash flow projections for the useful life.
The following table shows the respective useful lives for Property, plant and equipment:
Category
Estimated useful life
Buildings
5–45 years
Machinery and equipment
1–7 years
Leasehold improvements
1–10 years
Furniture, fixtures and other
3–5 years
Right-of-use assets and lease liabilities Accounting Policy
We determine whether an arrangement contains a lease at inception. Leases are included in Right-of-use assets,
Accrued & other current liabilities, Accrued & other non-current liabilities, current portion of Long-term debt, and
Long-term debt in our Consolidated Balance Sheets.
Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our
obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at
commencement date based on the present value of lease payments over the lease term. As our leases do not
provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement
date in determining the present value of lease payments. The Right-of-use assets include any lease payments made
at or before the commencement date and are reduced by lease incentives. Our Right-of-use asset and lease liability
valuation may include options to extend or terminate the lease when it is reasonably certain that we will exercise that
option. Lease expenses are recognized on a straight-line basis over the lease term.
We have lease agreements with lease and non-lease components. The lease components are accounted for
separately from non-lease components. The allocation of the consideration between lease and non-lease
components is based on the relative standalone prices of lease components included in the lease contracts.
Long-term debt Accounting Policy
Long-term debt represents debt issued privately without registration with a government authority and is payable to
others under the terms of a signed agreement. Long-term debt is initially recognized at fair value and subsequently
measured at amortized cost. Debt is qualified as long-term debt as long as the group has an unconditional right to
defer settlement of the liability for at least 12 months after the reporting period.
Interest and other costs Interest accruals and payments relating to long-term debt are accounted for as part of Accrued and other liabilities.
Interest and other costs should be accrued and recorded with the passage of time over the agreed term, regardless
of when the interest receipt or payment has taken place.
Commitments and contingencies Commitments
We have various contractual obligations, some of which are required to be recorded as liabilities in our Consolidated
Balance Sheets, including long- and short-term debt and lease commitments. Other contractual obligations, namely
unconditional purchase obligations, are generally not required to be recognized as liabilities but are required to be
disclosed.
Contingencies
ASML is subject to proceedings, litigation and other actual or potential claims, including those related to a potential
violation of laws and regulations. ASML’s customers may be subject to claims of infringement from third parties
alleging that the ASML equipment used by those customers in the manufacture of semiconductor products, and/or
the methods relating to use of the ASML equipment, infringes one or more patents issued to those third parties. If
these claims were successful, ASML could be required to indemnify such customers for some or all of the losses
incurred or damages assessed against them as a result of that infringement. As reported in the 2022 Annual Report,
ASML was subject to misappropriation of data relating to proprietary technology by a (now) former employee in
China. Although we do not believe that the misappropriation is material to our business, certain export control
regulations may have been violated. ASML reported the incident to relevant authorities.
In connection with any proceedings and claims, our management evaluates, based on the relevant facts and legal
principles, the likelihood of an unfavorable (or favorable) outcome, and whether the amount of the loss (or gain) can
be reasonably estimated. Judgment is required in these evaluations, including judgments regarding the validity of
asserted claims and the likely outcome of legal and administrative proceedings. The outcome of these proceedings,
however, is subject to a number of factors beyond our control, most notably the uncertainty associated with
predicting decisions by courts and administrative agencies. In addition, estimates of the potential costs (or gains)
associated with legal and administrative proceedings frequently cannot be subjected to any sensitivity analysis, as
damage estimates or settlement offers by claimants may bear little or no relation to the eventual outcome. Finally, in
any particular proceeding, we may agree to settle or to terminate a claim or proceeding in which we believe that it
would ultimately prevail where we believe that doing so, when taken together with other relevant commercial
considerations, is more effective than engaging in an expensive and protracted litigation, the outcome of which is
uncertain.
Employee benefits Contributions to defined contribution retirement benefit plans are recognized as an expense when employees have
rendered service entitling them to the contributions. Payments made to state-managed retirement benefit schemes
are dealt with as payments to defined contribution plans where our obligations under the plans are equivalent to
those arising in a defined contribution retirement benefit plan.
We maintain one multi-employer union defined benefit pension plan and various other defined contribution pension
plans covering a substantial number of our employees. ASML accounts for its multi-employer defined benefit plan as
if it were a defined contribution plan for the following reasons:
•ASML is affiliated to an industry-wide pension fund and uses the pension scheme in common with other
participating companies
•Under the regulations of the pension plan, the only obligation these participating companies have towards the
pension fund is to pay the annual premium liability. Participating companies are under no obligation whatsoever to
pay off any deficits the pension plan may incur. Nor have they any claim to any potential surpluses
Share-based compensation Long-term incentive bonus plans
Our LTI plans are covered by an overarching Employee Umbrella Share Plan, which is effective as of January 1, 2014,
and covers all employees. The main purpose of the grants of Equity Incentives under this Employee Umbrella Share
Plan is to continue to attract, reward and retain qualified and experienced industry professionals in an international
labor market. All grants under the Employee Umbrella Share Plan typically have a 2.5 to 3 year vesting period and are
subject to performance and/or service criteria.
As part of our LTI bonus, employees can be granted either a service or performance share-based payment plan. For
service-type plans, shares are granted at grant date and after having been in service for a set period, the participant
is awarded these shares at the vesting date. For performance plans, the same conditions apply as a service-type
plan. Additionally, the shares are conditionally granted and awarded based on the company specific performance
criteria, which can be split between market and non-market-based elements. These shares vest after completion of
the service period and the performance reached at vesting date.
The General Meeting approved the adoption of the most recent Remuneration Policy for the Board of Management
and the number of shares to be issued. The most recent Remuneration Policy includes the target and maximum
levels of the LTI plans, the performance measures and payout zone percentages. The policies for employees are
approved by the Board of Management. The General Meeting also approved the restrictions and limits to the Board
of Management for issuance/granting of ordinary shares, limits for restricting or excluding the preemption rights
accruing to shareholder and the restrictions and limits to the Board of Management for repurchasing ordinary shares
on behalf of the company.
The table below shows the performance criteria and the corresponding weight of the LTI performance plans granted
in 2023.
LTI performance plan criteria
Market/Non-Market element
Weight
Relative TSR
Market
30%
Strategic value drivers
Non-Market
30%
Technology Leadership Index
Non-Market
20%
ESG Measures
Non-Market
20%
Total
100%
The fair value of the market-based element is measured at the grant date incorporating the expected vesting and
expected value at vesting, using a tailored Monte Carlo simulation model. The fair value of the service plans and the
non-market-based elements of the performance plans is the share price at grant date less the present value of
expected dividends during the vesting period, as participants are not entitled to dividends payable and voting rights
during the vesting period. The likelihood of the conditions being met for service and non-market performance plans is
assessed as part of the company’s best estimate of the number of equity instruments that will ultimately vest.
Participants are entitled to a conditional grant of company shares upon awarding. Performance plans are subject to
cliff vesting and are accounted for on a straight-line basis. Service only plans are subject to graded vesting. Each
installment of the plan is therefore accounted as a separate grant with a separate fair value. This means that each
installment will be separately measured and attributed to expense over the related vesting period. Expenses for the
market-based element are recognized during vesting at a fixed vesting level (as the vesting expectation is
incorporated in the fair value) provided that all other performance conditions are met. Expenses for the non-market-
based elements and service plans are recognized during vesting at expected vesting levels, which are updated during
vesting period as necessary, with a final update/adjustment at vesting date. All share-based remuneration expenses
are recognized as personnel expense, with a corresponding entry in equity, during the vesting period of the award.
Share-based remuneration expenses are included in the same income statement line or lines in the functional
grouped Consolidated Statement of Operations as the compensation paid to the employees receiving the stock-
based awards.
The grant-date fair value of stock options was estimated using a Black-Scholes option valuation model. This Black-
Scholes model required the use of assumptions, including expected share price volatility, the estimated life of each
award and the estimated dividend yield. The risk-free interest rate used in the model is determined, based on an
index populated with euro-denominated European government agency bonds with high credit ratings and with a life
equal to the expected life of the equity-settled share-based payments. Our option plans typically vest over a 3-year
service period with any unexercised stock options expiring 10 years after the grant date. Options granted have fixed
exercise prices equal to the closing price of our shares listed at Euronext Amsterdam on grant date. The purchase of
shares against the exercise price is settled with the employees involved through deductions on their salary and the
issuance of shares upon exercising the stock options is deducted from our treasury shares.
Employee purchase plans are accounted on an accrual basis. The shares for employee purchase plans are issued on
a quarterly basis and the share purchase price is based on the closing share price of our listed shares on grant date,
which is the date after our quarterly filings. The purchased shares by employees are issued from our treasury shares.
Income taxes Accounting Policy
The asset and liability method is used in accounting for income taxes. Under this method, deferred tax assets and
liabilities are recognized for the tax effect of operating loss and tax credit carry forwards as well as for tax
consequences attributable to differences between the balance sheets carrying amounts of existing assets and
liabilities and their respective tax bases. If it is more likely than not that the carrying amounts of deferred tax assets will
not be realized, a valuation allowance is recorded for the difference. Income tax expense includes current and
deferred taxes on profit, related interest and penalties and non-recoverable withholding taxes that qualify as income
tax, as well as actual or potential withholding taxes on current and expected dividend income from group companies.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the
years in which temporary differences, operating loss carry forwards and tax credit carry forwards are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the
Consolidated Statements of Operations in the period that includes the enactment date. Deferred income taxes
originally recognized through OCI are recycled through earnings in future periods upon release of the connected item
from OCI to the statement of income.
We assess unrecognized tax benefits based on a two-step process. The first step is to evaluate the tax position for
recognition by determining if the weight of available evidence indicates that it is more likely than not that the position
will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to
measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. While
we believe we have appropriate support for the positions taken on our tax returns, we regularly assess the potential
outcomes of examinations by tax authorities in determining the adequacy of our income tax expense, and adjust the
income tax expense, income taxes payable and deferred taxes in the period in which the facts that give rise to a
revision become known.
Income taxes are affecting our Consolidated Statements of Operations, Consolidated Statements of Comprehensive
Income and Consolidated Balance Sheets. The disclosure of the income taxes is therefore split into:
•Income tax expense 
•Liability for unrecognized tax benefits
•Deferred taxes
Net income per ordinary share Basic net income per ordinary share is calculated by dividing net income by the weighted average number of ordinary
shares outstanding for that period.
The dilutive effect is calculated using the treasury stock method by dividing net income by the weighted average
number of ordinary shares outstanding for that period plus shares applicable to options and conditional shares
(dilutive potential ordinary shares). The calculation of diluted net income per ordinary share does not assume exercise
of options when exercise would be anti-dilutive. Excluded from the diluted weighted average number of shares
outstanding calculation are cumulative preference shares contingently issuable to the preference share foundation,
since they represent a different class of stock than the ordinary shares.
Foreign currency risk policy Foreign currency risk policy
It is our policy to hedge material transaction exposures, such as forecasted sales and purchase transactions. We
hedge these exposures through the use of forward foreign exchange contracts.
Financial instruments Accounting Policy – Derivative financial instruments and hedging activities
We measure all derivative financial instruments based on fair values derived from level 2 input criteria. We adopt
hedge accounting for hedges that are highly effective in offsetting the identified hedged risks taking into account
required effectiveness criteria.
Derivatives are initially recognized at fair value on the date a derivative contract is entered into and subsequently
remeasured. The method of recognizing the resulting gain or loss depends on whether the derivative is designated as
a hedging instrument, and if so, the nature of the item being hedged. We designate derivatives as one of the
following:
•A hedge of an exposure relating to changes in the fair value of a recognized asset or liability, that is attributable to a
particular risk (fair value hedge);
•A hedge of an exposure relating to the variability in the cash flows of a recognized asset or liability, or of a
forecasted transaction, that is attributable to a particular risk (cash flow hedge);
•A hedge of the foreign currency exposure relating to a net investment in a foreign operation (net investment
hedge).
We assess at the inception of the transaction the relationship between hedging instruments and hedged items, as
well as our risk management objectives and strategy for undertaking various hedging transactions. We also assess,
both at hedge inception and on an ongoing basis, whether derivatives that are used in hedging transactions are
highly effective in offsetting changes in fair values or cash flows of hedged items. The cash flows resulting from the
derivative financial instruments are classified in the Consolidated Statements of Cash Flows according to the nature
of the hedged item.
Fair value hedge
Changes in the fair value of a derivative financial instrument, that is designated and qualified as a fair value hedge,
along with the gain or loss on the hedged asset or liability that is attributable to the hedged risk, are recorded in the
Consolidated Statements of Operations.
Hedge accounting is discontinued when we revoke the hedging relationship, the hedging instrument expires or is
sold, terminated or exercised, or no longer qualifies for hedge accounting. The adjustment to the carrying amount of
the hedged item arising from the hedged risk is amortized to the Consolidated Statements of Operations from that
date.
Interest rate swaps that are being used to hedge the fair value of fixed loan coupons payable are designated as fair
value hedges. The change in fair value is intended to offset the change in the fair value of the underlying fixed loan
coupons, which is recorded accordingly. The gain or loss relating to the ineffective portion of interest rate swaps
hedging fixed loan coupons payable is recognized in the Consolidated Statements of Operations as Interest and
other, net.
Cash flow hedge
Changes in the fair value of a derivative that is designated and qualified as a cash flow hedge are recorded in OCI, net
of taxes, until the underlying hedged transaction is recognized in the Consolidated Statements of Operations. In the
event that the underlying hedge transaction will not occur within the specified time period, the gain or loss on the
related cash flow hedge is released from OCI and included in the Consolidated Statements of Operations, unless
extenuating circumstances exist that are related to the nature of the forecasted transaction and are outside our
control or influence and which cause the forecasted transaction to be probable of occurring on a date that is beyond
the specified time period. 
Foreign currency hedging instruments that are being used to hedge cash flows related to forecasted sales or
purchase transactions in non-functional currencies are designated as cash flow hedges. The gain or loss relating to
the ineffective portion of the foreign currency hedging instruments is recognized in the Consolidated Statements of
Operations in Net sales or Cost of sales.