ANNUAL REPORT 2021 237 FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS ʹˢ˥ ˧˛˘ Ѓˡ˔ˡ˖˜˔˟ ˬ˘˔˥ ˘ˡ˗˘˗ ʦʤ ʷ˘˖˘ˠ˕˘˥ ʥʣʥʤ (CONT’D) 48. FINANCIAL INSTRUMENTS (CONT’D) 48.1 FINANCIAL RISK MANAGEMENT POLICIES (cont’d) (b) Credit Risk (cont’d) (iii) Assessment of Impairment Losses (cont’d) Trade Receivables and Financing Receivables The Group applies the simplified approach to measure expected credit losses using a lifetime expected credit loss allowance for all trade and financing receivables. Inputs, Assumptions and Techniques used for Estimating Impairment Losses To measure the expected credit losses, trade and financing receivables have been grouped based on shared credit risk characteristics and the days past due. The Group measures the expected credit losses of certain major customers, trade receivables that are credit impaired and trade receivables with a high risk of default on individual basis based on their financial information, past trends of payments and external credit rating, where applicable. The expected loss rates are based on the payment profiles of sales over a period of 12 months from the measurement date and the corresponding historical credit losses experienced within this period. The historical loss rates are adjusted to reflect current and forward-looking information based on the comparison of historical and future debtor-turnover period of the Group. For impaired loans, advances and financing (“loan(s)”) which are individually assessed, judgement by management is required in the estimation of the amount and timing of future cash flows in the determination of impairment losses. In estimating these cash flows, judgements are made about the realisable value of collateral pledged and the borrower’s financial position. These estimations are based on assumptions and the actual results may differ from these, hence, resulting in changes to impairment losses recognised. Allowance for Impairment Losses Gross Amount Collective Impairment Carrying Amount The Group RM’000 RM’000 RM’000 2021 Current (not past due) 480,142 - 480,142 Less than 3 months past due 23,306 - 23,306 3 to 6 months past due 17,483 - 17,483 More than 6 months past due 90,420 (2,449) 87,971 611,351 (2,449) 608,902 2020 Current (not past due) 300,046 - 300,046 Less than 3 months past due 39,852 - 39,852 3 to 6 months past due 43,327 - 43,327 More than 6 months past due 20,674 (2,170) 18,504 403,899 (2,170) 401,729 The movements in the loss allowances in respect of financing and trade receivables are disclosed in Notes 14 and 16 to the financial statements respectively.
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