Urban Renewal Authority 2018-19 Annual Report

140 (expressed in Hong Kong Dollars) NOTES TO THE FINANCIAL STATEMENTS 3. Financial risk management and fair value of financial instruments (Continued) (a) Financial risk factors (Continued) (ii) Credit risk (Continued) The credit risk on building rehabilitation loans is limited as the Group has monitoring procedures to ensure that follow-up action is taken to recover overdue debts and place charges on the properties. The credit risk on trade receivables is limited as rental deposits in the form of cash are usually received from tenants. The credit risk on other receivables is limited as the Group is entitled to refund and has monitoring procedures to claim for refund of Buyer’s Stamp Duty and Ad Valorem Double Stamp Duty from the Government upon the happening of the refund event in accordance with Stamp Duty Ordinance Chapter 117. The Group measures loss allowances for trade receivables at an amount equal to lifetime ECLs, which is calculated using a provision matrix. Given the Group has not experienced any significant credit losses in the past, the allowance for expected credit losses is insignificant. Comparative information under HKAS 39 Prior to 1 April 2018, an impairment loss was recognised only when there was objective evidence of impairment (see note 2(h)(i) – policy applicable prior to 1 April 2018). As at 31 March 2018, trade receivables of $3,388,000 and instalments of building rehabilitation loans of $199,000 were past due but not impaired. These relate to a number of tenants/borrowers for whom there are no recent history of bad debt. The aging analysis of trade receivables and building rehabilitation loans that were not considered to be impaired was as follows: Trade receivables Building rehabilitation loans $’000 $’000 Less than 3 months 2,841 27 3 to 6 months 470 13 6 to 12 months 41 22 Over 1 year 36 137 Balance at 31 March 2018 3,388 199