Aon plc
For the period ended Dec 31, 2024. Filed Feb 18, 2025.
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FY2024 · Filed Feb 18, 2025
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Item 8. Financial Statements and Supplementary Data
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Aon plc
Opinion on the Financial Statements
We have audited the accompanying consolidated statements of financial position of Aon plc (the Company) as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, shareholders’ equity (deficit) and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 18, 2025 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
| Realizability of Deferred Tax Assets | |
| Description of the Matter | As discussed in Note 10 “Income Taxes” of the Notes to Consolidated Financial Statements, the Company had gross deferred tax assets of $2,570 million at December 31, 2024. Deferred tax assets are reduced by a valuation allowance if, based on the weight of all available evidence, in management’s judgment it is more likely than not that some portion, or all, of the deferred tax assets will not be realized.Conclusions on the realizability of certain net deferred tax assets involve significant management judgement including assumptions and estimates related to the amount, timing and jurisdiction of future taxable income. Auditing the deferred tax asset calculation and the related forecast of future taxable income was especially challenging as it involved a high degree of auditor judgement around management’s assumptions and estimates of future taxable income. |
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| How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design and operating effectiveness of internal controls that address the risks of material misstatement relating to the realizability of deferred tax assets, including controls over management’s projections of the amount, timing, and jurisdiction of future taxable income.Among other audit procedures performed, we evaluated the assumptions used by the Company to develop projections of future taxable income by income tax jurisdiction and tested the completeness and accuracy of the underlying data used in the projections. For example, we inspected the assumptions made in the calculation of future taxable income, including the growth rate, the estimates of the reversal of cumulative temporary differences, and the capital and debt requirements by jurisdiction. We compared the projections of future taxable income with the actual results of prior periods. Further, we involved tax subject matter professionals in the review of the information identified. |
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| Valuation of customer relationship intangible assets in the acquisition of NFP | |
| Description of the Matter | As discussed in Note 6 “Acquisitions and Disposition of Businesses” of the Notes to Consolidated Financial Statements, the Company acquired NFP Intermediate Holdings A Corp (also referred to as “NFP”) on April 25, 2024. The transaction was accounted for under the acquisition method of accounting. The Company preliminarily determined the fair value of the identified customer relationship intangible assets to be $5,950 million. The fair value was estimated based on a multi-period excess earnings method of the income approach and used financial projections developed by management applying market participant assumptions.Auditing the Company’s accounting for certain of the acquired customer relationship intangible assets was complex due to estimation uncertainty in the Company’s preliminary determination of the fair value. The estimation uncertainty was primarily due to the sensitivity of the fair value of certain of the customer relationship intangible assets to underlying assumptions about the future performance of the acquired business. The significant assumptions used to estimate the fair value included EBITA margin and discount rate. These significant assumptions are forward looking and could be affected by future economic and market conditions. |
| How We Addressed the Matter in Our Audit | We obtained an understanding of the Company’s process for evaluating the valuation of acquired customer relationship intangible assets. We tested the design and operating effectiveness of the Company's controls over the estimation process supporting the measurement and recognition of customer relationship intangible assets. We also tested controls regarding management’s review of assumptions used in the valuation model.To test the estimated fair value of the Company’s customer relationship intangible assets, we performed, with the assistance of our valuation specialists, audit procedures that included evaluating the Company’s valuation methodology, significant assumptions used and completeness and accuracy of the underlying data. For example, we compared the significant assumptions to historical and current industry, market and economic trends. We also tested the underlying source information used and verified the mathematical accuracy of the calculations within the valuation model. |
We have served as the Company’s auditor since 1986.
Chicago, Illinois
February 18, 2025
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