Yinson Annual Report 2021

219 ANNUAL REPORT 2021 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) (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 and contract assets The Group and the Company applies the MFRS 9 simplified approach to measure ECL which uses a lifetime ECL for all trade receivables and contract assets. The Group and the Company defines a financial instrument as 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: t UIF EFCUPS JT JO CSFBDI PG mOBODJBM DPWFOBOUT t DPODFTTJPOT IBWF CFFO NBEF CZ UIF MFOEFS SFMBUJOH UP UIF EFCUPS T mOBODJBM EJGmDVMUZ t JU JT CFDPNJOH QSPCBCMF UIBU UIF EFCUPS XJMM FOUFS CBOLSVQUDZ PS PUIFS mOBODJBM SFPSHBOJTBUJPO t UIF EFCUPS JT JOTPMWFOU Financial instruments that are credit-impaired are assessed on individual basis. Note 42(b) sets out the measurement details of ECL. (iii) Financial liabilities (a) Initial recognition and measurement Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Group’s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, lease liabilities, financial guarantee contracts and derivative financial instruments.