Corporate Report for the year ended 30 June 2022
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Section B: Notes to the Group financial statements for the year ended 30 June 2022
Section B: Notes to the Group financial statements for the year ended 30 June 2022
B8
Working capital (continued)
Trade receivables (continued) The loss allowance for the trade receivables as at 30 June 2022 and 30 June 2021 was determined as follows:
2022
Up to 90 days past due
More than 90 days past due
Current
Total
Expected loss rate
2%
4%
65%
NA¹ 195
Gross carrying amount ($M)
132
28
35
Loss allowance ($M)
(2)
(1)
(23)
(26)
2021
More than 90 days past due
Up to 90 days past due
Current
Total
Expected loss rate
2%
4%
67%
NA¹ 166
Gross carrying amount ($M)
117
22
27
Loss allowance ($M)
(2)
(1)
(18)
(21)
1. NA―Not applicable. The closing loss allowances for trade receivables reconciles to the opening loss allowance as follows:
2022
2021
$M
$M
Opening loss allowance
21
18
Increase in loss allowance recognised in the profit and loss during the year
6
5
Receivables written off during the year as uncollectible
(1)
(2)
Closing loss allowance
26
21
Trade receivables are written off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include the failure of a debtor to engage in a repayment plan with the Group, and a failure to make contractual payments for an extended period. Other financial assets at amortised cost The Group classifies its financial assets at amortised cost only if both of the following criteria are met: • the asset is held within a business model whose objective is to collect the contractual cash flows; and • the contractual terms give rise to cash flows that are solely payments of principal and interest. Other financial assets at amortised cost include concession financial assets, other receivables and loan receivables at call recorded within trade and other receivables. As at 30 June 2022, having assessed the impact from the economic uncertainty relating to COVID-19, near-term interest rates and inflation, management do not consider there to be evidence of a significant increase in credit risk since the initial recognition of these balances. This is mainly due to there being no significant change in the nature of or the collectability of these balances. The loss allowance for other financial assets continues to be limited to 12 months of expected losses. These balances continue to have low credit risk as they have a low risk of default and the issuer has a strong capacity to meet its contractual cash flow obligations in the near-term. The loss allowance for other financial assets is $nil (2021: $nil).
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