Annual report eng.2018

N otes To The Consolidated Financial Statements AL MAZAYA HOLDING K.S.C.P. AND ITS SUBSIDIARIES As At 31 December 2018 133 ANNUAL REPORT 2018 (All amounts are in Kuwaiti Dinars) Trade receivable The Group applies the IFRS 9 simplified model of recognizing lifetime expected credit losses for all trade receivables as this item do not have a significant financing component. In measuring the expected credit losses, trade receivables have been assessed on a collective basis respectively and grouped based on shared credit risk characteristics and the days past due. The expected loss rates are based on the payment profile for sales over the past 48 months before December 31, 2018 and January 1, 2018 respectively as well as the corresponding historical credit losses during that period. The historical rates are adjusted to reflect current and forwarding looking macroeconomic factors affecting the customer’s ability to settle the amount outstanding. However given the short period exposed to credit risk, the impact of these macroeconomic factors has not been considered significant within the reporting period. Trade receivables are written off when there is no reasonable expectation of recovery. Failure to make payments within 180 days from the invoice date and failure to engage with the Group on alternative payment arrangement amongst other is considered indicators of no reasonable expectation of recovery ad therefore is considered as credit impaired On the above basis, the expected credit loss for trade receivables as at December 31, 2018 and January 1, 2018 was determined as follows: The Group has implemented stage 3 for measuring future expected credit losses for certain other debit balances. The Group’s management estimated the impairment loss of these receivables by KD 9,096,995 (2017 – KD 1,185,108) which represents the full amount of impaired loss. Cash at banks The Group’s cash at banks, measured at amortized cost are considered to have a low credit risk. The Group's cash deposits are placed with high credit rating financial institutions with no recent history of default. Based on management’s assessment, the expected credit loss impact arising from such financial assets are insignificant to the Group as the risk of default has not increased significantly since initial recognition. As at December 31, 2018 As at January 1, 2018 Less than 30 days Less than 30 days 31 – 60 days 31 – 60 days 61 – 90 days 61 – 90 days 91- 180 days 91- 180 days More than 180 days More than 180 days Total Total 4.11% 3,059,571 125,749 5.09% 1,670,447 85,022 8.22% 78,525 6,454 10.18% 107,761 10,970 12.33% 906,684 111,794 15.27% 129,288 19,742 24.66% 365,696 90,180 30.54% 160,296 48,953 100% 1,217,995 1,217,995 100% 712,956 712,956 - 5,628,471 1,552,172 - 2,780,748 877,643 Expected credit loss rate Gross carrying Amount Lifetime expected credit loss Expected credit loss rate Gross carrying Amount Lifetime expected credit loss