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Trade receivables and impairment (Part 2)

This issue provides the continuation of the requirements of MFRS 139 Financial Instruments: Recognition and Measurement on trade receivables and the related impairment model.

Application of MFRS 139’s impairment model to trade receivables. This Hot Topic applied only to short-term trade receivables that have no stated interest rate that are measure at amortised cost subsequent to initial recognition.

We have discussed the individual impairment assessment of trade receivables in Part 1. In Part 2 of this Hot Topics, we will focus on the collective impairment assessment followed by flowchart for impairment review of portfolio of trade receivables. The last section of this publication covers the issue of credit losses and dispute risk.