MSM Malaysia Holdings Berhad Annual Report 2019

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 25 AMOUNTS DUE FROM/(TO) SUBSIDIARIES, OTHER RELATED COMPANIES, ULTIMATE HOLDING COMPANY AND FELDA (CONTINUED) (a) Amounts due from/(to) subsidiaries are unsecured, interest free, denominated in Ringgit Malaysia and have credit terms of 30 to 180 days (2018: 30 to 180 days). (b) Amounts due from/(to) other related companies are unsecured, interest free, denominated in Ringgit Malaysia and have credit terms of 30 to 60 days (2018: 30 to 60 days). (c) The amount due from/(to) the ultimate holding company represents non trade balance, which is expected to be settled within the normal credit period of 90 days (2018: 90 days) and is denominated in Ringgit Malaysia, unsecured and interest free. (d) Amount due to FELDA relates to office rental charges which is denominated in Ringgit Malaysia, unsecured and interest free and repayable within 60 days. (e) The fair value of amount due from/(to) subsidiaries, other related companies, ultimate holding company and FELDA approximates its carrying value, as the impact of discounting is not significant. Reconciliation of loss allowance To measure the expected credit losses, amounts due from subsidiaries, other related companies and ultimate holding company have been grouped based on shared credit risk characteristics and the days past due. For amounts due from subsidiaries, other related companies and ultimate holding company which are trade related, the expected loss rates are based on the payment profiles of revenue earned over a period of 24 months before 31 December 2019 or 31 December 2018 respectively and the corresponding historical credit losses experienced within this period. The historical loss rates were not adjusted to reflect forward-looking information on macroeconomic factors affecting the ability of the customers to settle the receivables, as the Group has not identified any forward looking assumptions which correlate to the historical loss rates. No loss allowance have been recognised on amounts due from subsidiaries, other related companies and ultimate holding company during the year (2018: nil) other than an amount due from a related company of RM3,854,250 and amount due from a subsidiary of RM8,000 (Note 8). 193 FINANCIAL STATEMENTS 08