110
LIPPO MALLS INDONESIA RETAIL TRUST ANNUAL REPORT 2014
28. FINANCIAL INSTRUMENTS: INFORMATION ON FINANCIAL RISKS (CONT’D)
28C. Fair value of financial instruments
The analyses of financial instruments that are measured subsequent to initial recognition at fair value, grouped into
Levels 1 to 3 are disclosed in the relevant notes to the financial statements. These include both the significant financial
instruments stated at amortised cost and at fair value in the statement of financial position. The carrying values of
current financial instruments approximate their fair values due to the short-term maturity of these instruments and
the disclosures of fair value are not made when the carrying amount of current financial instruments is a reasonable
approximation of the fair value.
28D. Credit risk on financial assets
Financial assets that are potentially subject to concentrations of credit risk and failures by counterparties to discharge
their obligations in full or in a timely manner consist principally of cash balances with banks, cash equivalents,
receivables, and certain other financial assets. The maximum exposure to credit risk is: the total of the fair value of
the financial assets; the maximum amount the entity could have to pay if the guarantee is called on; and the full
amount of any payable commitments at the end of the reporting year. Credit risk on cash balances with banks and
any other financial instruments is limited because the counter-parties are entities with acceptable credit ratings. Credit
risk on other financial assets is limited because the other parties are entities with acceptable credit ratings. For credit
risk on receivables an ongoing credit evaluation is performed on the financial condition of the debtors and a loss
from impairment is recognised in profit or loss. The exposure to credit risk with customers are controlled by setting
limits on the exposure to individual customers and these are disseminated to the relevant persons concerned and
compliance is monitored by management. There is no significant concentration of credit risk on receivables, as the
exposure is spread over a large number of counter-parties and customers unless otherwise disclosed in the notes to
the financial statements below.
Note 19 discloses the maturity of the cash and cash equivalents balances.
As part of the process of setting customer credit limits, different credit terms are used. The average credit period
granted to trade receivables customers is about 30 (2013: 30) days. But some customers take a longer period to
settle the amounts.
Ageing analysis of the age of trade receivable amounts that are past due as at the end of reporting year but not impaired:
Group
2014
2013
$’000
$’000
Trade receivables:
Less than 30 days
410
390
31 to 60 days
191
189
Over 61 days
1,485
1,010
At end of year
2,086
1,589
The allowance totalling $310,000 (2013: $298,000) is based on individual accounts that are determined to be impaired
at the reporting year end date. These are not secured.
Other receivables are normally with no fixed terms and therefore there is no maturity.
There is no concentration of credit risk with respect to trade receivables, as there are a large number of tenants.
Revenue from the Group’s top customer amounted to $15,995,000 (2013: $15,155,000) of the Group’s total revenue.
Notes to the Financial Statements
(Cont’d)
31 December 2014
