Frontken Berhad Annual Report 2020

Annual Report 2020 129 FRONTKEN CORPORATION BERHAD 200401012517 (651020-T) Notes to the Financial Statements (cont’d) 28. FINANCIAL INSTRUMENTS (CONT’D) (a) Financial Risk Management Policies (Cont’d) Credit risk (Cont’d) (iii) Assessment of impairment losses (Cont’d) • Trade receivables (Cont’d) The information about the exposure to credit risk and the loss allowances calculated under MFRS 9 for trade receivables are summarised below:- (Cont’d) Gross Individual Collective Carrying Amount Impairment Impairment Amount The Group RM RM RM RM 2019 Not past due 72,997,238 – – 72,997,238 Past due:- - less than 1 month 7,650,548 – – 7,650,548 - 1 to 9 months 5,608,690 – (103,035) 5,505,655 - over 9 months 2,182,309 (1,963,552) (72,487) 146,270 Trade receivables 88,438,785 (1,963,552) (175,522) 86,299,711 The movements in the loss allowances in respect of trade receivables is disclosed in Note 17 to the financial statements. • Other receivables The Group applies the 3-stage general approach to measuring expected credit losses for its other receivables. Under this approach, the Group assesses whether there is a significant increase in credit risk on the receivables by comparing their risk of default as at the reporting date with the risk of default as at the date of initial recognition based on available reasonable and supportable forward-looking information. Regardless of the assessment, a significant increase in credit risk is presumed if a receivable is more than 30 days past due in making a contractual payment. The Group considers a receivable is credit impaired when the receivable is in significant financial difficulty, for instances, the receivable is in breach of financial covenants or insolvent. Receivables that are credit impaired are assessed individually while other receivables are assessed on a collective basis. Based on the assessment performed, the identified impairment loss was immaterial and hence, it is not provided for. • Fixed deposits with licensed banks, cash and bank balances The Group considers these banks and financial institutions have low credit risks. In addition, some of the bank balances are insured by Government agencies. Therefore, the Group is of the view that the loss allowance is immaterial and hence, it is not provided for.