317 SECTION 6 FINANCIAL STATEMENTS INTEGRATED ANNUAL REPORT 2025 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2025 42 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED) Credit risk (continued) (a) Receivables (continued) General 3-stage approach for other debt instruments financial assets (continued) Based on the above, loss allowance is measured on either 12 months ECL or lifetime ECL, by considering the likelihood that the debtor would not be able to repay during the contractual period, the percentage of contractual cash flows that will not be collected if default happens and the outstanding amount that is exposed to default risk. No significant changes to estimation techniques or assumptions were made during the reporting period. There is no loss allowance for other financial asset at amortised cost as at 31 December 2025 and 31 December 2024, except for trade and other receivables, amounts owing by subsidiaries, amounts owing by associates and amounts owing by joint ventures. For movement of allowance for impairment of trade and other receivables, amounts owing by subsidiaries, amounts owing by associates and amounts owing by joint ventures, refer to Note 13, 14(a), 15 and 16(a) respectively. (b) Intercompany balances The Company provides unsecured loans and advances to subsidiaries. The Company monitors the results of its subsidiaries regularly. As at 31 December 2025 and 31 December 2024, the maximum exposure to credit risk is represented by their carrying amounts in the statement of financial position. Management has taken reasonable steps to ensure that the recoverability of intercompany receivables are high. As at 31 December 2025 and 31 December 2024, the amounts owing by subsidiaries were considered performing, except for certain subsidiaries. For movement of allowance for impairment of amount owing by subsidiaries, refer to Note 14(a). Advances to subsidiaries that are repayable on demand and interest-free are classified as amortised cost in the Company’s financial statements because the Company’s business model is to hold and collect the contractual cash flows and those cash flows represent solely payments of principal and interest. The Company applied 12 months ECL for these advances to subsidiaries. There is no loss allowance recognised on these advances to subsidiaries as all strategies indicate that the Company could fully recover the outstanding balance of the advances to subsidiaries. Advances to subsidiaries in the Company’s separate financial statements are assessed on individual basis for ECL measurement, as credit risk information is obtained and monitored based on each advances to subsidiary.
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