SELECTED ACCOUNTING PRINCIPLES
Receivables from customers include amounts invoiced and receivables accrued to revenue which have not been measured and invoiced due to the customer settlement system used. The accounting policy in the scope of accrued revenue is described in Note 12. Receivables from customers are measured at the amounts originally invoiced (taking into account the effect of discounting, if material), less allowances / write-downs. Impairment allowances are recognised for both overdue and current receivables based on probability-weighted credit loss to be incurred should any of the following events occur:
If a given counterparty’s receivables are overdue by more than 90 days, they are classified as bad debt, i.e. the 100% probability of insolvency is assigned to that counterparty. For receivables from customers, the Group has separated a portfolio of strategic counterparties (counterparty with credit exposure exceeding PLN 1 000 thousand) and a portfolio of the remaining counterparties. For the portfolio of strategic counterparties, the risk of insolvency of strategic counterparties is assessed based on ratings assigned to the counterparties using an internal scoring model and appropriately restated to account for the probability of default. The expected credit loss, in line with IFRS 9 Financial Instruments, is calculated based on the estimated potential recoveries from security interests. It is expected that the historical performance information concerning receivables from other counterparties may reflect the credit risk that will be faced in future periods. The expected credit losses for this group of counterparties were estimated using the receivables ageing matrix and the percentage ratios assigned to the various ranges and groups (including receivables claimed at court, receivables from counterparties in bankruptcy) allowing to estimate the value of receivables from customers expected to be outstanding. In order to take into account the impact of future factors (in relation to strategic and other counterparties), the Group adjusts the parameters related to the probability of default using the quotations of Credit Default Swap instruments for individual ratings. Revaluation allowances of receivables are recognised in such cost categories which correspond to the function of the assets component, i.e. in costs of operating activity or financial costs – depending on the type of receivables the allowance refers to. PROFESSIONAL JUDGEMENT AND ESTIMATES In accordance with the requirements of IFRS 9 Financial Instruments, the Group estimates impairment losses on receivables from customers attributable to expected credit losses. The allowance calculation methodology is described above. |
Table 1
Export to ExcelAs at 31 December 2020 |
As at 31 December 2019 |
|
---|---|---|
Value of items before allowance/write-down: | ||
Receivables from buyers, of which: | 2,423,607 | 2,306,208 |
Additional assessment of revenue from sales of electricity and distribution services |
814,235 | 689,395 |
Receivables claimed at court | 184,664 | 213,900 |
Total | 2,608,271 | 2,520,108 |
Allowance/write-down | ||
Receivables from buyers | (60,522) | (39,655) |
Receivables claimed at court | (184,664) | (189,707) |
Total | (245,186) | (229,362) |
Value of item net of allowance (carrying amount) | ||
Receivables from buyers | 2,363,085 | 2,266,553 |
Receivables claimed at court | – | 24,193 |
Total, of which: | 2,363,085 | 2,290,746 |
Current | 2,363,085 | 2,290,746 |
In accordance with the model described above, the Group estimates the impairment loss.
Ageing of receivables from customers as at 31 December 2020
Export to ExcelNot past due | Past due | Total | |||||
---|---|---|---|---|---|---|---|
<30 days | 30-90 days | 90-180 days | 180-360 days | >360 days | |||
Value of item before allowance/write-down | 2,133 713 | 217,763 | 51,711 | 32,521 | 34,199 | 138,364 | 2,608,271 |
Allowance/write-down | (11,586) | (9,250) | (19,347) | (32,489) | (34,178) | (138,336) | (245,186) |
Net Value | 2,122,127 | 208,513 | 32,364 | 32 | 21 | 28 | 2,363,085 |
Ageing of receivables from customers as at 31 December 2019
Export to ExcelNot past due | Past due | Total | |||||
---|---|---|---|---|---|---|---|
<30 days | 30-90 days | 90-180 days | 180-360 days | >360 days | |||
Value of item before allowance/write-down | 2,039,689 | 216,273 | 33,588 | 18,031 | 31,981 | 180,546 | 2,520,108 |
Allowance/write-down | (9,541) | (6,252) | (10,534) | (15,329) | (31,356) | (156,350) | (229,362) |
Net Value | 2,030,148 | 210,021 | 23,054 | 2,702 | 625 | 24,196 | 2,290,746 |
As at the balance sheet date, the Group did not have any material non-collectible items not covered with an allowance.
Change in allowances on receivables from customers
Export to ExcelYear ended 31 December 2020 |
Year ended 31 December 2019 |
|
---|---|---|
Opening balance | (229,362) | (221,759) |
Recognised | (37,665) | (13,931) |
Utilized | 6,240 | 5,101 |
Reversed | 580 | 1,221 |
Other movements | 15,030 | 6 |
Foreign exchange differences from translation of foreign entity | (9) | – |
Closing balance | (245,186) | (229,362) |