TUNG LOK RESTAURANTS (2000) LTD / Annual Report
2016
67
Notes to the financial statements
For the financial year ended 31 March 2016
12.
Trade receivables (cont’d)
Receivables that are impaired
The Group’s trade receivables that are impaired at the end of the reporting period and the movement of the allowance
accounts used to record the impairment are as follows:
Group
2016
2015
$
$
Trade receivables – nominal amounts
282,899
205,797
Less: Allowance for impairment
(282,899)
(205,797)
–
–
Movement in the allowance for doubtful debts
At the beginning of the financial year
205,797
310,297
Charge for the year for a former subsidiary (Note 16(C))
–
205,797
Charge for the year
77,102
–
Written off during the year
–
(56,352)
Allowance recovered during the year (Note 5)
–
(253,945)
At the end of the financial year
282,899
205,797
Before accepting any new customer, the Group obtains customer’s general profile to assess the potential customer’s
credit worthiness and defines credit limit to customer. Credit limits attributed to customers are reviewed periodically.
Most of the trade receivables that are neither past due nor impaired relate to customers which the Company has
assessed to be creditworthy based on the credit evaluation process performed by management.
Management has assessed the past due debts and noted that as there has not been a significant change in credit
quality and the amounts are still considered recoverable. The Group does not hold any collateral over these balances.
Included in the Group’s trade receivables are debtors with a carrying amount of $907,832 (2015: $1,134,042) which are
past due at the end of the reporting period for which the Group has provided $282,899 (2015: $205,797) for impairment,
mainly pertaining to a former subsidiary that has suffered significant financial losses.
In determining the recoverability of a trade receivable, the Group considers any change in the credit quality of the trade
receivable from the date credit was initially granted up to the end of the reporting period. The concentration of credit risk
is limited due to the customer base being large and unrelated. Accordingly, the management believe that there are no
further credit allowances required in excess of the allowance for doubtful debts.
