My EG Services Berhad Annual Report 2019

MY E.G. SERVICES BERHAD [Registration No. 200001003034 (505639-K)] 186 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD ENDED 31 DECEMBER 2019 (CONT’D) 51. FINANCIAL INSTRUMENTS (CONT’D) 51.1 FINANCIAL RISK MANAGEMENT POLICIES (cont’d) (b) Credit Risk (cont’d) (iii) Assessment of Impairment Losses (cont’d) Trade Receivables and Financing Receivables (cont’d) Also, the Group considers any trade receivables having financial difficulty or in default with significant balances outstanding for more than 60 to 180 days are deemed credit impaired and assesses for their risk of loss individually. 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 on macroeconomic factors affecting the ability of the customers to settle their debts. 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. The information about the exposure to credit risk and the loss allowances calculated under MFRS 9 for both trade and financing receivables (exclude accrued income) are summarised below:- Gross Amount Collective Impairment Carrying Amount The Group RM’000 RM’000 RM’00 31.12.2019 Current (not past due) 362,456 - 362,456 Less than 3 months past due 19,504 - 19,504 3 to 6 months past due 34,037 - 34,037 More than 6 months past due 60,650 (1,578) 59,072 476,647 (1,578) 475,069