Fraser & Neave Holdings Bhd Annual Report 2019

WWW . F N . C O M . M Y 198 F R A S E R & N E A V E H O L D I N G S B H D NOTES TO THE FINANCIAL STATEMENTS 29. FINANCIAL INSTRUMENTS (CONTINUED) (D) CREDIT RISK (CONTINUED) Trade receivables (continued) Recognition and measurement of impairment losses (continued) The Group uses an allowance matrix to measure ECLs of trade receivables for all segments. Consistent with the debt recovery process, invoices which are past due 90 days will be considered as credit impaired. Loss rates are calculated using a ‘roll rate’ method based on the probability of a receivable progressing through successive stages of delinquency to 90 days past due. Loss rates are based on actual credit loss experience over the past two years. The Group also considers differences between (a) economic conditions during the period over which the historic data has been collected, (b) current conditions and (c) the Group’s view of economic conditions over the expected lives of the receivables. Nevertheless, the Group believes that these factors are immaterial for the purpose of impairment calculation for the financial year. The following table provides information about the exposure to credit risk and ECLs for trade receivables as at 30 September 2019 which are grouped together as they are expected to have similar risk nature. 2019 Group Gross carrying amount RM’000 Loss allowances RM’000 Net balance RM’000 Current (not past due) 368,479 (508) 367,971 1-30 days past due 53,868 (230) 53,638 31-60 days past due 3,723 (325) 3,398 61-90 days past due 234 (34) 200 More than 90 days past due 1,659 (1,490) 169 427,963 (2,587) 425,376 There are trade receivables where the Group has not recognised any loss allowance as the trade receivables are supported by collateral such as bank guarantees, properties and other credit enhancement in managing exposure to credit risk. The movements in the allowance for impairment in respect of trade receivables during the financial year are shown below: Note Group RM’000 Balance at 1 October 2018 as per MFRS 139 503 Adjustments on initial application of MFRS 9 34 2,003 Balance at 1 October 2018 as per MFRS 9 2,506 Impairment loss recognised 24 511 Impairment loss reversed 24 (199) Impairment loss written off (231) Balance at 30 September 2019 2,587