2015-16 SaskEnergy Annual Report

10. Financial risk management (continued)

e. Credit risk Credit risk is the risk of financial loss to the Corporation if a customer or counterparty to a financial or derivative instrument fails to meet its contractual obligations. The Corporation is exposed to credit risk through cash, trade and other receivables, debt retirement funds and derivative instrument assets. Credit risk related to cash and debt retirement funds is minimized by dealing with institutions that have strong credit ratings and holding highly-rated financial securities. The Corporation extends credit to its customers in the normal course of business and is at risk of loss in the event of non-performance by counterparties on certain of the financial and derivative instruments. To reduce its credit risk, the Corporation has established policies and procedures to monitor and limit the amount of credit extended to its customers and counterparties and may require letters of credit and other forms of security. As at March 31, 2016, the maximum credit exposure to a single counterparty was $1 million (2014 – $5 million). The carrying amount of financial and derivative assets represents the maximum credit exposure as follows: March December (millions) 31, 2016 31, 2014 Cash $ 11 $ 5 Trade and other receivables 104 148 Debt retirement funds 102 93 Fair value of derivative instrument assets 11 21 $ 228 $ 267 The following reflects an aging summary of the Corporation’s trade and other receivables. All trade and other receivables not classified as current at the end of the reporting period are considered past due. March December (millions) 31, 2016 31, 2014 Current $ 92 $ 138 30 - 59 days 7 6 60 - 89 days 4 2 Greater than 90 days 7 6 110 152 Allowance for doubtful accounts (6) (4) $ 104 $ 148

The change in the allowance for doubtful accounts in respect of trade and other receivables was as follows: March

December 31, 2014

(millions)

31, 2016

Balance, beginning of period

$

1 3 –

$

4 3

Provision Write-offs

(1)

Balance, end of period

$

4

$

6

69

2015-16 ANNUAL REPORT SASKENERGY

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