Annual Report 2024 2025

the organization uses the off-balance sheet method whereby the hedging instruments are disclosed in the notes without being recognized in the balance sheet. Financial derivatives become favourable (assets) or unfavourable (liabilities) as a result of fluctuations in market interest rates or foreign exchange rates relative to their terms. The fair value of publicly traded derivatives, securities and investments is based on quoted market prices at the reporting date. Revenue Revenue is recognized when there is persuasive evidence that an arrangement exists, and risks and rewards are transferred. The amounts are posted to the statement of income, net of taxes. Pension plan The Foundation covers the costs relating to the professional pension of all its workers, as well as their assignees, under the legal prescription. The pension plan is covered by Swiss Law in accordance with the Forum’s statutes. The pension obligations and the plan assets are managed by a legally independent pension fund. The organization, management and financing of pension plans are governed by the law (LPP), together with the deed of foundation and the regulations applicable to pensions in force. Transactions with related parties According to Swiss GAAP RPC 15, the following foundations are considered related parties: –Schwab Foundation for Social Entrepreneurship –Forum of Young Global Leaders Foundation –World Arts Forum Foundation –Global Shapers Community Foundation –World Economic Forum LLC –World Economic Forum Japan –Members of the Board of Trustees –Members of the Managing Board –Members of the Executive Committee –Members of the Audit & Risk Committee –“Fonds de prévoyance en faveur du personnel du World Economic Forum” Agreements were signed with some of these related parties, such as the Schwab Foundation, Forum of Young Global Leaders, World Arts Forum and Global Shapers Community, stating that the Forum will be covering their deficit, if there is any.All other transactions between the parties are conducted at arm’s length. Donations Institutional donations: –These are funds that are committed by a written donation agreement to the Forum and are recorded in full in the profit and loss statements as donations in the year that the commitment is made. All donations received where use is limited by restrictions, donor-imposed purpose or time restrictions have been classified as restricted funds and are recognized as income up to the level of expenses incurred on the project during the year under the category “Restricted Funds”. The Forum can also voluntarily designate funds for specific purposes or for internal projects. –Foreign currency exchange gains and losses realized between the date of the written donation agreement and the date of the actual receipt of cash and those unrealized at the date of the statement of the financial position are recorded in the profit and loss statement. Individual donations: –These are accounted for on a cash basis given their relative size and significance. Risk management policy Risk assessment To satisfy the requirements of an internal control system the Forum operates a continuous review of risk and control through various independent institutional review and governance organs such as the Board of Trustees, Audit and Risk Committee and Statutory Audit under Swiss Law. Internally, the Forum is governed by the Managing Board under the leadership of the President and CEO, Børge Brende. Internal functions, such as the Engagement Leadership Team and Technology Steering Groups, safeguard the suitability and eligibility of partners and members and review project activities. Management of exchange risk exposure The Swiss franc (CHF) is the functional currency of the Foundation. The Forum receives its revenue in CHF and US dollars. Most expenses are in CHF, and a minority are in euros and US dollars. Exchange risk exposure is very low on the organization’s day-to-day activities, and generated gains and losses are posted in the profit and loss statement. Nevertheless, the exchange risk is high considering that the Forum borrowed the equivalent in US dollars of CHF 95 million. As a result, the organization entered into a cross- currency interest swap to hedge its exposure. Annual Report 2024-2025 Financial Statements71