Yinson Annual Report 2020

226 Notes to the financial statements (cont’d) For the financial year ended 31 January 2020 Yinson Holdings Berhad SECTION 7 ACCOUNTABILITY 2. Summary of significant accounting policies (continued) 2.17 Financial instruments (continued) (ii) Impairment of financial assets (continued) (a) General 3-stage approach for other receivables (continued) Macroeconomic information (such as market interest rates or growth rates) is incorporated as part of the internal rating model. Regardless of the analysis above, a significant increase in credit risk is presumed if a debtor is more than 30 days past due in making a contractual payment. Note 42(b) sets out the measurement details of ECL. (b) Simplified approach for trade receivables The Group and the Company applies the MFRS 9 simplified approach to measure ECL which uses a lifetime ECL for all trade receivables. The Group and the Company defines a financial instrument as being in default, which is fully aligned with the definition of credit-impaired, when it meets one or more of the following criteria: (i) Quantitative criteria The Group and the Company defines a financial instrument as being in default, when the counterparty fails to make contractual payment within 90 days of when they fall due. (ii) Qualitative criteria The debtor meets unlikeliness to pay criteria, which indicates the debtor is in significant financial difficulty. The Group and the Company considers the following instances: • the debtor is in breach of financial covenants • concessions have been made by the lender relating to the debtor’s financial difficulty • it is becoming probable that the debtor will enter bankruptcy or other financial reorganisation • the debtor is insolvent Financial instruments that are credit-impaired are assessed on individual basis. Note 42(b) sets out the measurement details of ECL.