ITF

2018 ITF Trust Annual Report and Financial Statements

Issue link: http://itf.uberflip.com/i/1122517

Contents of this Issue

Navigation

Page 33 of 38

Notes (Forming part of the financial statements) (b) Credit risk Credit risk is managed on a group basis. For banks and financial ins tu ons, only independently rated par es with a minimum ra ng of 'A' are accepted. The group trades only with recognised, creditworthy third par es and its debtor balances are monitored on an ongoing basis with a result that the group's exposure to bad debts is not significant. The maximum exposure is the carrying amount as disclosed in sec on (a), above. Based on the contractual condi ons trade and other payables are due within one month. For some trade receivables the group may obtain security in the form of guarantees, deeds of undertaking or le ers of credit which can be called upon if the counterparty is in default under the terms of the agreement. Impairment of financial assets The group has trade receivables that are subject to the expected credit loss model. While cash and cash equivalents and contract assets (accrued income) are also subject to the impairment requirements of IFRS 9, the iden fied impairment loss was immaterial. The group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a life me expected loss allowance for all trade receivables and contract assets. To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteris cs and the days past due. The expected loss rates are based on the payment profiles of sales over a period before the balance sheet date and the corresponding historical credit losses experienced within this period. The historical loss rates are adjusted to reflect current and forward-looking informa on on macroeconomic factors affec ng the ability of the customers to se le the receivables. On that basis, the loss allowance as at 31 December 2018 and 2017 was determined as follows: Not past due Past due (0-30 days) Past due (31-180 days) Past due (more than 180 days) Trade receivables are wri en off when there is no reasonable expecta on of recovery. Indicators that there is no reasonable expecta on of recovery include failure to engage in repayment plans and failure to make payments greater than 365 days past due. Impairment losses are presented as net impairment losses within opera ng profit. Subsequent recoveries of amounts previously wri en off are credited against the same line item. The group is also exposed to credit risk in rela on to investments that are measured at fair value through profit or loss. The maximum exposure at the end of the repor ng period is the carrying amount of these investments $60.3m (2017: $68.6m). The closing loss allowances for trade receivables as at 31 December 2018 reconcile to the opening loss allowances as follows: Balance at 1 January Receivables wri en off during the year as uncollectable Increase in loss allowance recognised in profit or loss during the year Balance at 31 December Expected loss % 2018 % 1.63% 1.18% 2.20% 46.44% Gross carrying amount 2018 $000 7,345 423 636 351 8,755 Loss allowance 2018 $000 (120) (5) (14) (163) (302) Expected loss % 2017 % 0.99% 1.11% 2.19% 26.47 Gross carrying amount 2017 % 11,592 814 137 612 13,155 Loss allowance 2017 % (115) (9) (3) (162) (289) 2018 $000 2017 $000 289 (120) 133 302 241 (15) 63 289 ITF ANNUAL REPORT AND FINANCIAL STATEMENTS / 32 34. FINANCIAL INSTRUMENTS (CONTINUED)

Articles in this issue

view archives of ITF - 2018 ITF Trust Annual Report and Financial Statements