6.2.2. RECEIVABLES

Accounting policies

Receivables include chiefly short-term trade receivables (mainly in connection with sale of gas fuel), taxes, customs duties and social security. 
 

Short-term trade receivables are initially recognised at their transaction price if they do not contain a significant financing component. 

 

Upon initial recognition, short-term trade receivables that meet the SPPI test and are held in a “hold to collect” business model are classified at amortised cost less impairment losses.
 

Taxes, customs duties and social security receivable by the Group are determined in accordance with applicable laws and regulations. 

 

Material estimates

Impairment of financial assets

The amount of impairment loss on receivables equals the difference between the carrying amount of an asset and the present value of estimated future cash flows discounted at the asset’s original effective interest rate.

 

The Group monitors changes in credit risk relating to a given financial asset and classifies financial assets to one of three buckets for determining impairment related to future expected loss:

  • Bucket 1 - Not impaired exposures, where the risk of lifetime impairment is not significantly higher than the risk of a given exposure as at the grant date. The expected credit loss for exposures in this bucket is calculated for a term of the next 12 months or shorter, depending on the maturity date of the exposure.
    Financial assets in this bucket are characterised by low risk and high level of creditworthiness confirmed by an external rating institution.
  • Bucket 2 - Not impaired exposures, where the risk of lifetime impairment is significantly higher than the risk related to a given exposure as at the date of grant. For this bucket, the probability of an insolvency event is calculated for the lifetime of the asset.

 

  • Bucket 3 - Impaired exposures, recognised when the asset was held by the Group. For this bucket, the probability of an insolvency event is calculated for the lifetime of the asset. Interest on impaired assets is calculated by applying the effective interest rate against the net asset value (net of impairment loss). Consequently, net interest (net of impairment loss) is recognised in the statement of profit or loss.

 

Depending on the type of financial asset, impairment loss is determined using either the statistical or case-by-case approach.

 

According to the statistical approach (matrix, cluster), impairment losses on financial assets are recognised for a large number of current financial assets of relatively small values (homogeneous portfolio). Impairment losses are determined based on an analysis of historical data on payment of past due receivables in particular ageing groups and the migration matrix method. The results of the analysis are then used to calculate recovery ratios on the basis of which the amounts of impairment losses on receivables in each ageing group are determined.

 

In accordance with the case-by-case approach, the Group estimates the expected credit losses for those items that could not be classified into a homogeneous portfolio, such as:

  • lease receivables,
  • acquired debt issues,
  • material trade receivables (all trade receivables with a total value exceeding the minimum amount defined by the Company based on historical data as at the reporting date of the financial statements),
  • trade receivables with initial maturity of more than one year,
  • receivables from sale of shares,
  • receivables under equity contributions.

 

 

The Group also identifies impaired instruments:

  • with a default on payment exceeding 90 days,
  • against which bankruptcy/arrangement proceedings are pending,
  • with respect to which a legal dispute is pending as to the size/legitimacy of the claim concerning the receivable.

 

 

Expected impairment of such exposures is calculated over the period until the expected end of the collection period.

 

Impairment losses are charged to other expenses or finance costs, as appropriate, depending on the type of the item for which an impairment loss is recognised.

 

Receivables
2019
2018
 
Gross carrying amount
Write-down
Net carrying amount
Gross carrying amount
Write-down
Net carrying amount
Trade receivables (mainly in connection with sale of gas fuel)
 4,887
 (376)
 4,511
 5,331
 (467)
 4,864
VAT receivable
 510
 -
 510
 572
 -
 572
Corporate income tax receivable
 42
 -
 42
 48
 -
 48
Other taxes, customs duties and social security receivable
 16
 (4)
 12
 17
 (3)
 14
Loans advanced
 78
 (55)
 23
 69
 (55)
 14
Other receivables
 799
 (393)
 406
 615
 (385)
 230
Total
 6,332
 (828)
 5,504
 6,652
 (910)
 5,742

Trade receivables are the source of the Group’s credit and currency risk exposure. For information on credit risk management (including assessment of the credit quality of receivables and credit risk concentration), see Note 7.3.1. For information on currency risk related to receivables, see Note 7.3.2.2.

 

Change in impairment losses on trade receivables in the period

 

Trade receivables covered by cluster analysis
Trade receivables covered by case-by-case analysis
Measured at fair value through profit or loss

 

lifetime expected loss
impaired
12-month expected loss
lifetime expected loss
impaired
As at Jan 1st 2018
 6
 221
 8
 -
 85
 2
Effect of amended IFRS 9
 6
 -
 2
 -
 (5)
 -
Increase taken to profit or loss
 47
 16
 6
 -
 309
 -
Decrease taken to profit or loss
 (45)
 (15)
 (10)
 -
 (161)
 -
Impairment losses used
 -
 (28)
 -
 -
 -
 -
Transfers
 (9)
 9
 -
 -
 -
 -
Effect of exchange rate movements and other
 -
 21
 -
 -
 2
 -
As at Dec 31st 2018
 5
 224
 6
 -
 230
 2
Increase taken to profit or loss
 61
 6
 5
 -
 129
 -
Decrease taken to profit or loss
 (41)
 (10)
 (2)
 -
 (197)
 (1)
Impairment losses used
 -
 (40)
 -
 -
 -
 -
Transfers
 (18)
 19
 -
 -
 (1)
 -
Effect of exchange rate movements and other
 -
 2
 1
 -
 (4)
 -
As at Dec 31st 2019
 7
 201
 10
 -
 157
 1

 

Change of gross carrying amount of trade receivables in current period

 

Trade receivables covered by cluster analysis
Trade receivables covered by case-by-case analysis
Measured at fair value through profit or loss

 

lifetime expected loss
impaired
12-month expected loss
lifetime expected loss
impaired
Gross carrying amount as at Jan 1st  2018
 2,520
 447
 1,537
 240
 316
 5
Transfer to group with lifetime expected loss
 126
 (126)
 -
 -
 -
 -
Transfer to impaired group
 (17)
 17
 -
 -
 -
 -
Repaid financial assets
 (18,589)
 (125)
 (22,039)
 (211)
 (1,023)
 (4)
Newly recognised financial assets
 19,003
 181
 21,831
 203
 1,174
 -
Write-offs
 -
 (33)
 -
 -
 -
 -
Changes due to modification of risk parameters
 -
 -
 7
 -
 -
 -
Other effect
 (144)
 8
 3
 (14)
 38
 -
Gross carrying amount as at Dec 31st  2018
 2,899
 369
 1,339
 218
 505
 1
Transfer to group with lifetime expected loss
 16
 (1)
 (15)
 -
 -
 -
Transfer to impaired group
 (27)
 25
 1
 -
 1
 -
Repaid financial assets
 (20,778)
 (170)
 (22,291)
 (17)
 (900)
 -
Newly recognised financial assets
 21,005
 103
 22,022
 34
 661
 -
Write-offs
 (1)
 (44)
 -
 -
 -
 -
Changes due to modification of risk parameters
 -
 2
 -
 -
 (2)
 -
Other effect
 (72)
 (4)
 42
 11
 (45)
 -
Gross carrying amount as at Dec 31st 2019
 3,042
 280
 1,098
 246
 220
 1

 

Change in impairment losses on other financial assets in the period

 

Other financial assets covered by cluster analysis
Other financial assets covered by case-by-case analysis

 

lifetime expected loss
impaired
12-month expected loss
lifetime expected loss
impaired
As at Jan 1st 2018
 13
 285
 1
 -
 93
Increase taken to profit or loss
 7
 3
 -
 -
 76
Decrease taken to profit or loss
 (5)
 (5)
 -
 -
 (93)
Impairment losses used
 -
 (2)
 -
 -
 -
Transfers
 (16)
 16
 -
 -
 -
Effect of exchange rate movements and other
 22
 (9)
 1
 -
 -
As at Dec 31st 2018
 21
 288
 2
 -
 76
Increase taken to profit or loss
 7
 12
 -
 -
 -
Decrease taken to profit or loss
 (4)
 (6)
 -
 -
 (1)
Impairment losses used
 -
 (1)
 -
 -
 -
Transfers
 (26)
 18
 -
 -
 8
Effect of exchange rate movements and other
 18
 (16)
 (1)
 -
 -
As at Dec 31st 2019
 16
 295
 1
 -
 83

 

Changes in gross carrying amount of other financial assets

 

Other financial assets covered by cluster analysis
Other financial assets covered by case-by-case analysis
Measured at fair value through profit or loss
Measured at fair value through other comprehensive income

 

lifetime expected loss
impaired
12-month expected loss
lifetime expected loss
impaired
Gross carrying amount  as at Jan 1st 2018
 192
 346
 100
 1
 88
 12
 22
Transfer to group with lifetime expected loss
 -
 70
 -
 -
 -
 -
 -
Transfer to impaired group
 (70)
 -
 -
 -
 -
 -
 -
Repaid financial assets
 (286)
 (124)
 (101)
 -
 (37)
 (6)
 -
Newly recognised financial assets
 388
 9
 36
 -
 13
 24
 18
Write-offs
 -
 (2)
 -
 -
 -
 -
 -
Other effect
 9
 (1)
 33
 -
 20
 -
 -
Gross carrying amount  as at Dec 31st 2018
 233
 298
 68
 1
 84
 30
 40
Transfer to group with 12-month expected loss
 -
 -
 -
 -
 7
 -
 -
Transfer to group with lifetime expected loss
 -
 23
 -
 -
 -
 -
 -
Transfer to impaired group
 (30)
 -
 -
 -
 -
 -
 -
Repaid financial assets
 (459)
 (18)
 (104)
 (27)
 -
 -
 -
Newly recognised financial assets
 552
 36
 51
 -
 -
 1
 -
Write-offs
 (1)
 (1)
 -
 -
 -
 -
 -
Other effect
 56
 (2)
 16
 26
 17
 -
 -
Gross carrying amount  as at Dec 31st 2019
 351
 336
 31
 -
 108
 31
 40