Smurfit Westrock plc

These critical accounting policies are both important to the portrayal of Smurfit Westrock’s financial condition and results of

operations and require some of management’s most subjective and complex judgments. The accounting for these matters involves the

making of estimates based on current facts, circumstances and assumptions that, in management’s judgment, could change in a manner

that would materially affect management’s future estimates with respect to such matters and, accordingly, could cause Smurfit

Westrock’s future reported financial condition and results of operations to differ materially from those that it is currently reporting

based on management’s current estimates.

Smurfit Westrock believes the following are critical accounting policies and estimates used in the preparation of its Consolidated

Financial Statements:

Business Combinations

From time to time, Smurfit Westrock may enter into business combinations, such as the Combination with WestRock which closed on

July 5, 2024. As described further in “Note 2. Acquisitions” to the Consolidated Financial Statements, Smurfit Westrock allocated the

$13,461 million aggregate merger consideration to the fair values of WestRock assets acquired and liabilities assumed as of the

Closing Date. The excess of the purchase price over the fair value of net assets acquired was allocated to goodwill.

The purchase price allocation for the Merger was revised as additional information about the acquisition-date fair value of assets and

liabilities became available during the measurement period (aperiod not to exceed 12 months from the Closing Date). The purchase

price allocation was completed during the third quarter of fiscal 2025 after the Company completed the evaluation of the fair value of

acquired property, plant and equipment, intangible assets and certain income tax related items in addition to ensuring all other assets

and liabilities and contingencies had been identified and recorded. The acquisition method of accounting required significant estimates

and assumptions regarding the fair values of the elements of a business combination. The most significant assumptions related to the

fair value estimates of plant and machinery assets acquired as part of property, plant and equipment. The company prepared estimates

and engaged third-party valuation specialists to assist in the valuation of plant and machinery assets, which required significant

judgments and assumptions inherent in the estimates regarding items such as deriving the effective age, economic lives, residual

values and other factors, including estimating future cash flows that Smurfit Westrock expects to generate from the acquired assets.

If the subsequent actual results and updated projections of the underlying business activity change compared with the assumptions and

projections used to develop these values, we could record future impairment charges. In addition, we have estimated the economic

lives of certain acquired assets, and these lives are used to calculate depreciation and amortization expense. If the Company’s

estimates of the economic lives change, depreciation or amortization expenses could be increased or decreased, or the acquired asset

could be impaired.

See “Note 1.13. Business Combinations” and “Note 2. Acquisitions” to the Consolidated Financial Statements for Smurfit Westrock’s

accounting policy on business combinations and more information on the Combination with WestRock.

Goodwill Impairment

Smurfit Westrock reviews the carrying value of its goodwill annually during the fourth quarter, or more often if events or changes in

circumstances indicate that the carrying amount may exceed fair value as set forth in ASC 350, “Intangibles — Goodwill and Other”

(“ASC 350”). Smurfit Westrock tests goodwill for impairment at the reporting unit level. During the third quarter of 2024, following

the completion of the Combination, the Company changed its reportable segments and reassessed its reporting units. As a result of this

reassessment, the Company identified the following reporting units: (1) North America, which includes operations in the U.S. and

Canada, (2) Europe, MEA and APAC, (3) Mexico, (4) Argentina and Chile, (5) Colombia & Central Cluster, and (6) Brazil. See “Note

1.12. Goodwill and Non-current Assets” and “Note 10. Goodwill” to the Consolidated Financial Statements for Smurfit Westrock’s

accounting policy on goodwill and more information on reporting units.

During the fourth quarter of the year ended December 31, 2025, Smurfit Westrock completed its annual goodwill impairment testing

for each of the Company’s reporting units by performing a qualitative assessment. Multiple factors were evaluated to assess whether it

was more likely than not that the estimated fair value of any reporting unit was below its carrying value. These factors included, but

were not limited to, its expectations for macroeconomic conditions, industry and market considerations, and financial performance,

including planned net sales and earnings of each reporting unit. The qualitative assessment also considered changes since the last

qualitative assessment of all the Company’s reporting units, whichwas performed in 2024.

As a result of the qualitative assessment, Smurfit Westrock determined that it was more likely than not that the estimated fair value of

each reporting unit with goodwill exceeded its respective carrying value. Therefore, the Company determined that goodwill for each

reporting unit was not impaired and that a quantitative goodwill test was not required. See “Note 10. Goodwill” to the Consolidated

Financial Statements for further information about the Company’s annual assessment of goodwill for impairment.

Although the Company believes all relevant factors were considered in the qualitative impairment analysis to reach the conclusion that

goodwill was not impaired, significant changes in any one of the assumptions, estimates and market factors underlying Smurfit

Westrock’s fair value determinations could produce a significantly different result potentially leading to the recording of an

impairment that could have significant impacts on the results of operations and financial position of the Company. Smurfit Westrock

has not made any material changes to its impairment loss assessment methodology during the past three fiscal years.

Accounting for Income Taxes

Smurfit Westrock’s income tax expense, deferred tax assets and liabilities, and liabilities for unrecognized tax benefits, reflect

management’s best assessment of estimated current and future taxes to be paid. Significant judgments and estimates are required in

determining the consolidated income tax expense. In evaluating its ability to recover deferred tax assets and establishing or reducing a

valuation allowance in the jurisdiction from which they arise, Smurfit Westrock considers all available positive and negative evidence,

including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and the

effect of enacted tax rates expected to apply in the periods in which the deferred tax assets or liabilities are anticipated to be settled or

realized. A high degree of judgment is required to assess the impact of possible future outcomes on Smurfit Westrock’s current and

deferred tax positions.

As a result of this evaluation, Smurfit Westrock recorded valuation allowances of$429 million as of December 31, 2025 and

$372 million as of December 31, 2024, related to certain deferred tax assets, primarily tax loss carryforwards, where there is

uncertainty as to the ultimate realization of a benefit. Smurfit Westrock regularly reviews the recoverability of deferred tax assets for

adjustments to taxable income, changes in tax laws or interpretations thereof and tax rates, as all of these could impact its effective tax

rate.

Smurfit Westrock is subject to routine tax audits and examinations. It uses significant judgment in (i) determining whether a tax

position, based solely on its technical merits, is “more likely than not” to be sustained upon examination and (ii) measuring the tax

benefit as the largest amount of benefit that is “more likely than not” to be realized upon settlement. Smurfit Westrock does not record

any benefit for tax positions that do not meet the “more likely than not” recognition threshold at the balance sheet date. Resolutions of

current uncertain tax positions are not expected to have a material adverse effect on the effective tax rate or on cashflows. Smurfit

Westrock has a progressive dividend strategy which means that it will remit earnings from some of its overseas subsidiaries to the

parent company in Ireland. Its foreign earnings are generally taxed at rates that are higher than in Ireland and so no incremental tax

should arise there, due to the availability of foreign tax credits. However, some earnings may be subject to limited additional foreign

taxes upon repatriation. Smurfit Westrock continues to indefinitely reinvest its foreign earnings as part of its wider capital allocation

strategy. To the extent that it cannot assert indefinite reinvestment of earnings, it records a deferred tax liability on its foreign earnings

at the applicable tax rate if it is not otherwise possible to remit earnings without additional tax.

As of December 31, 2025 and 2024, Smurfit Westrock recognized a deferred tax liability of$209 million and$179 million,

respectively, on unremitted earnings, in respect of foreign income taxes or withholding taxes for expected or assumed repatriation,

respectively. As Smurfit Westrock can decide which subsidiaries should pay dividends, it does not expect that this deferred tax

liability will have a material impact on its cash flows in the foreseeable future.

The determination of the amount of unrecognized deferred tax liability related to indefinitely invested foreign earnings not subject to

additional outside basis difference taxes is not practicable. A 1% change in the effective tax rate would increase or decrease Smurfit

Westrock’s income tax expense for the year ended December 31, 2025 by$10 million.

In 2021, political agreement was reached by the OECD Inclusive Framework on a two-pillar approach to international tax reform. This

includes the commitment to introduce a minimum effective tax rate of 15% for companies with revenue above €750 million (‘Pillar

Two’). The agreement has been enacted in most of the countries where Smurfit Westrock has business activities. The law was enacted

in Ireland with an effective date January 1, 2024, and it was broadly in line with the OECD Inclusive Framework. For the year ended

December 31, 2025, a Pillar Two assessment was performed and its impact was not significant.

The Company has made accounting policy elections to account for the income tax effect(s) of U.S. Global Intangible Low-Taxed

Income (GILTI) as a period cost and to account for the income tax effect(s) of investment tax credits under the flow-through method.

Pension Obligations

The determination of pension obligations and pension expense requires various assumptions that can significantly affect liability and

expense amounts, such as the expected long-term rate of return on plan assets, discount rates, projected future compensation increases

and mortality rates for each of Smurfit Westrock’s plans. These assumptions are determined annually in conjunction with Smurfit

Westrock’s actuary. The accounting for these matters involves the making of estimates based on current facts, circumstances and

assumptions that, in management’s judgment, could change in a manner that would materially affect management’s future estimates

with respect to such matters and, accordingly, could cause Smurfit Westrock’s future reported financial condition and results of

operations to differ materially from those that Smurfit Westrock is currently reporting based on management’s current estimates.

A 50-basis point change in the discount rate, compensation level and expected long-term rate of return on plan assets, factoring in our

corridor as appropriate, would have had the following effect on Smurfit Westrock’s pension expense for the year ended December 31,

2025, (in millions):

NEW ACCOUNTING STANDARDS

See “Note 1. Description of Business and Summary of Significant Accounting Policies” of the Notes to the Consolidated Financial

Statements included elsewhere in this Annual Report on Form 10-Kfor a full description of recent accounting pronouncements,

including the respective expected dates of adoption and expected effects on Smurfit Westrock’s results of operations and financial

condition.