NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2023 NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2023 41 FINANCIAL INSTRUMENTS (CONT’D) (i) Credit risk (cont’d) Impairment losses on trade and other receivables, amounts owing by associates and debt investment recognised in profit or loss and included in “other operating expenses” were as follows: Group Note 2023 2022 $’000 $’000 Other receivables 743 62,673* Debt investment 10 – 18,015* Amounts owing by associates 8 57 339 Trade receivables and accrued receivables 7,142 22,389 7,942 103,416 * In 2022, impairment losses on other receivables and debt investment of $80,688,000 were recognised on the face of the consolidated statement of profit or loss. These impairment losses were in relation to a receivable from HCP Group and the investment in a bond issued by the Sincere Property Group. Trade and other receivables and contract assets The Group has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations are performed on all customers requiring credit over a certain amount. The Group does not require collateral in respect of these financial assets. The Group limits its exposure to credit risk from trade receivables by collecting deposits as collateral, where possible. For trade receivables and contract assets relating to sale of development properties, if a purchaser defaults on payments, the Group may enforce payments via legal proceedings or if the purchaser is assessed to be insolvent, the Group may take possession of the units, retain a portion of the sales consideration, and resell the property. In monitoring customer credit risk, the Group considers the trade history of the customers with the Group, aging profile, maturity and existence of previous financial difficulties. Exposure to credit risk The maximum exposure to credit risk for trade and other receivables and contract assets at the reporting date by business segment is set out below: Group Company 2023 2022 2023 2022 $’000 $’000 $’000 $’000 Property development 2,574,892 1,887,697 6,261,613 5,796,323 Hotel operations 150,784 212,276 1,468,348 2,176,094 Investment properties 140,995 130,205 3,456,272 1,436,920 Others 59,213 48,327 3,155,365 3,494,252 2,925,884 2,278,505 14,341,598 12,903,589 41 FINANCIAL INSTRUMENTS (CONT’D) (i) Credit risk (cont’d) Expected credit loss assessment on trade receivables The Group uses an allowance matrix to measure the ECLs of trade receivables from individual customers, which comprise a very large number of small balances. Loss rates are based on actual credit loss experience over the past 3 years (2022: 3 years). These rates are adjusted to reflect differences between economic conditions during the period over which the historic data has been collected, current conditions and the Group’s view of economic conditions over the expected lives of the receivables. The following table provides information about the exposure to credit risk and ECLs for trade receivables and accrued receivables as at reporting date: Group Company Gross carrying amount Impairment loss allowance Gross carrying amount Impairment loss allowance $’000 $’000 $’000 $’000 2023 Current (not past due) 199,178 13,172 196 – 1 – 30 days past due 53,642 4,400 261 – 31 – 60 days past due 16,763 2,667 45 – 61 – 90 days past due 5,607 1,330 – – More than 90 days past due 37,099 9,677 410 150 312,289 31,246 912 150 2022 Current (not past due) 183,109 27,278 2,789 – 1 – 30 days past due 43,263 76 8,576 13 31 – 60 days past due 16,601 281 114 3 61 – 90 days past due 16,008 2,497 11 1 More than 90 days past due 33,388 5,505 193 65 292,369 35,637 11,683 82 Movements in allowance for impairment in respect of trade and other receivables and accrued receivables The movements in the allowance for impairment in respect of trade and other receivables (excluding amounts owing by subsidiaries (note 7), associates (note 8) and joint ventures (note 9)) and accrued receivables during the year are as follows: Group Lifetime ECL Company Lifetime ECL 2023 2022 2023 2022 $’000 $’000 $’000 $’000 Allowance for impairment on trade receivables and accrued receivables At 1 January 35,637 17,025 82 135 Impairment loss recognised/ (reversed) 7,142 22,389 68 (46) Impairment loss utilised (9,276) (1,204) – (7) Disposal of subsidiaries – (232) – – Translation differences on consolidation (2,257) (2,341) – – At 31 December 31,246 35,637 150 82 FINANCIALS FINANCIALS ANNUAL REPORT 2023 CITY DEVELOPMENTS LIMITED 219 218
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