Fraser & Neave Holdings Bhd Annual Report 2020

211 06 financial statements ANNUAL REPORT 2020 Notes to The Financial Statements (Cont’d.) 30. 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 three 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 not material 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 the end of the reporting period which are grouped together as they are expected to have similar risk nature. 2020 2019 Group Gross carrying amount RM’000 Loss allowances RM’000 Net balance RM’000 Gross carrying amount RM’000 Loss allowances RM’000 Net balance RM’000 Current (not past due) 387,007 (607) 386,400 375,732 (508) 375,224 1-30 days past due 46,733 (187) 46,546 53,868 (230) 53,638 31-60 days past due 5,293 (382) 4,911 3,723 (325) 3,398 61-90 days past due 656 (187) 469 234 (34) 200 439,689 (1,363) 438,436 433,557 (1,097) 432,460 Credit impaired More than 90 days past due 5,855 (640) 5,215 1,075 (906) 169 Individually impaired 619 (619) – 584 (584) – 446,163 (2,622) 443,541 435,216 (2,587) 432,629 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: Group Lifetime ECL RM’000 Credit impaired RM’000 Total RM’000 Balance at 1 October 2018 2,003 503 2,506 Amount written off – (231) (231) Net remeasurement of loss allowance – 312 312 Balance at 30 September 2019/1 October 2019 2,003 584 2,587 Amount written off – (381) (381) Net remeasurement of loss allowance – 416 416 Balance at 30 September 2020 2,003 619 2,622 As at 30 September 2020, RM381,000 (2019: RM231,000) of trade receivables were written off but they are still subject to enforcement activity.