Investor Presentaiton
CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | NET WORKING CAPITAL
The credit quality of advance payments receivable and
accounts receivable is evaluated according to KONE's credit
policy. According to this policy, the rules for credit quality
evaluation are set separately for the new equipment business
and the service business. The credit quality is evaluated both
on the basis of the aging of the receivables as well as on the
basis of individual case by case customer analysis in order to
identify customers with a potential higher credit risk due to
individual customer specific reasons. The bad debt provision
for the accounts receivable is recognized on the basis of this
credit quality evaluation using the expected credit loss model.
In 2020, KONE modified the calculation parameters for the
receivables aging based allowance as well as recorded
impairment charges on certain individual cases to reflect the
effect of increased risk for credit losses pertaining to COVID-
19. Overall, the disruption to the business arising from
COVID-19 has been limited with a significant part of KONE's
operations being considered essential and as such, allowed
even during lockdowns. According to management
assessment, at the end of the reporting period the pandemic
no longer poses additional risk to collection of receivables.
The amount of bad debt provision recorded to cover
doubtful accounts was EUR 284.4 (262.5) million at the end of
the financial period.
Aging of accounts receivable
Aging structure of the accounts receivable after recognition of impairment, MEUR
Not past due and less than one month due receivables
Past due 1-3 months
Past due 3-6 months
Past due > 6 months
Accounts receivable in the consolidated statement of financial position
Dec 31, 2021
1,923.4
278.5
Dec 31, 2020
1,674.5
277.5
133.1
134.8
86.4
91.9
2,421.4
2,178.6
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KONE ANNUAL REVIEW 2021View entire presentation