Yinson Annual Report 2021

218 YINSON HOLDINGS BERHAD SECTION 07 : ACCOUNTABILITY NOTES TO THE FINANCIAL STATEMENTS (CONT’D) For the financial year ended 31 January 2021 2 Summary of significant accounting policies (continued) 2.17 Financial instruments (continued) (ii) Impairment of financial assets (continued) The Group and the Company have four types of financial instruments that are subject to the ECL model: (i) Trade and other receivables (ii) Contract assets (iii) Finance lease receivables (iv) Cash and bank balances While cash and bank balances are also subject to the impairment requirements of MFRS 9, the identified impairment loss was immaterial. ECL represent a probability-weighted estimate of the difference between the present value of cash flows according to contracts and the present value of cash flows the Group and the Company expects to receive, over the remaining life of the financial instrument. For financial guarantee contracts, the ECL is the difference between the expected payments to reimburse the holder of the guaranteed debt instrument less any amounts that the Company expects to receive from the holder, the debtor or any other party. The measurement of ECL reflects: t BO VOCJBTFE BOE QSPCBCJMJUZ XFJHIUFE BNPVOU UIBU JT EFUFSNJOFE CZ FWBMVBUJOH B SBOHF PG QPTTJCMF outcomes; t UIF UJNF WBMVF PG NPOFZ BOE t SFBTPOBCMF BOE TVQQPSUBCMF JOGPSNBUJPO UIBU JT BWBJMBCMF XJUIPVU VOEVF DPTU PS FGGPSU BU UIF SFQPSUJOH EBUF about past events, current conditions and forecasts of future economic conditions. (a) General 3-stage approach for other receivables At each reporting date, the Group and the Company measures loss allowance at an amount equal to 12 month ECL if credit risk on a financial instrument or a group of financial instruments has not increased significantly since initial recognition. For all other financial instruments, a loss allowance at an amount equal to lifetime ECL is required. The general 3-stage approach is applied for debt instruments at amortised cost other than trade receivables. The Group and the Company considers the probability of default upon initial recognition of the asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk, the Group and the Company compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. It considers available reasonable and supportable forward-looking information. The following indicators are incorporated: t JOUFSOBM DSFEJU SBUJOH t FYUFSOBM DSFEJU SBUJOH BT GBS BT BWBJMBCMF t BDUVBM PS FYQFDUFE TJHOJmDBOU BEWFSTF DIBOHFT JO CVTJOFTT mOBODJBM PS FDPOPNJD DPOEJUJPOT UIBU BSF expected to cause a significant change to the debtor’s ability to meet its obligations t BDUVBM PS FYQFDUFE TJHOJmDBOU DIBOHFT JO UIF PQFSBUJOH SFTVMUT PG UIF EFCUPS t TJHOJmDBOU JODSFBTFT JO DSFEJU SJTL PO PUIFS mOBODJBM JOTUSVNFOUT PG UIF TBNF EFCUPS t TJHOJmDBOU DIBOHFT JO UIF WBMVF PG UIF DPMMBUFSBM TVQQPSUJOH UIF PCMJHBUJPO PS JO UIF RVBMJUZ PG UIJSE party guarantees or credit enhancements t TJHOJmDBOU DIBOHFT JO UIF FYQFDUFE QFSGPSNBODF BOE CFIBWJPVS PG UIF EFCUPS JODMVEJOH DIBOHFT JO the payment status and changes in the operating results of the debtor