97
A.P. Moller-Maersk Annual Report 2020
Financials
Consolidated financial statements
Notes index
Note 16 Financial instruments and risks - continued
Table 16.9
Maturity analysis of trade receivables
Receivables not due
Less than 90 days overdue
91-365 days overdue
More than 1 year overdue
Receivables, gross
Provision for bad debt
Carrying amount
The loss allowance provision for trade receivables as at 31 December 2020 reconciles to the opening loss allowance
as follows:
Table 16.10
Change in provision for bad debt
1 January
Provision made
Amount used
Amount reversed
Amounts in USD million =
2020
2019
2,358
1,133
161
152
3,804
170
3,634
2,431
1,020
150
145
3,746
215
3,531
2020
2019
215
269
238
217
160
149
124
121
Table 16.9 and table 16.10
Credit risk
Trade receivables
The Group has exposure to financial and commercial
counterparties but has no particular concentration of
customers or suppliers. To minimise the credit risk, finan-
cial vetting is undertaken for all major customers and
financial institutions. Adequate security is required for
commercial counterparties, and credit limits are set for
financial institutions and key commercial counterparties.
The Group applies the simplified approach to providing
the expected credit losses prescribed by IFRS 9, which
permits the use of the lifetime expected loss provision
for all trade receivables. To measure the expected credit
losses, trade receivables have been grouped based on
shared credit risk characteristics and the days past due.
In accordance with IFRS 9, not due trade receivables
have also been impaired.
Approximately 89% (67%) of the provision for bad debt
is related to trade receivables overdue by more than
one year.
Other financial assets at amortised cost
Other financial assets at amortised cost comprise loans
receivable, finance lease receivables and other receiva-
bles. These financial assets are considered to have low
credit risk, and thus the impairment provision calculated
based on 12 months of expected losses is considered
immaterial. The financial assets are considered to be low
risk when they have a low risk of default, and the issuer
has a strong capacity to meet its contractual cash flow
obligations in the near term.
Table 16.11
Liquidity risk
The Group's objective is to maintain a liquidity profile
in line with an investment grade credit rating. Capital is
managed for the Group. The equity share of total equity
and liabilities was 55.0% at the end of 2020 (52.0% end
of 2019).
For information about cash and bank balances in coun-
tries with exchange control or other restrictions, see text
to the consolidated cash flow statement.
Based on the liquidity reserve, loans for the financing of
specific assets, the maturity of outstanding loans, and the
current investment profile, the Group's financial resources
are deemed satisfactory.
The average term to maturity of loan facilities in the Group
was about five years (about five years at 31 December
2019).
Further information about capital structure and funding
strategy can be found on pages 60-62.
1 Liquidity reserve is defined as undrawn committed
revolving facilities with more than one year to expiry,
securities, term deposits and cash and bank balances,
excluding securities and balances in countries with
exchange control or other restrictions.
Transfer, assets held for sale
-
Exchange rate adjustment and others
1
-1
31 December
170
215
Table 16.11
Net interest-bearing debt and liquidity
2020
2019
Borrowings
15,373
Net interest-bearing debt
9,232
16,753
11,662
Liquidity reserveĀ¹
10,962
10,485View entire presentation