NOTES TO THE FINANCIAL STATEMENTS Year ended 31 December 2024 41 FINANCIAL INSTRUMENTS (CONT’D) (i) Credit risk (cont’d) Impairment of amounts owing by HCP Group (cont’d) 2023 During 2023, discussions between the bankruptcy administrator, creditors of Sincere Property Group and potential investors were held. As at 31 December 2023, Sincere Property Group remained under bankruptcy reorganisation and no concrete reorganisation plan has been approved by the Chongqing No 5 Intermediate People’s Court. As at 31 December 2023, the Group assessed that the amounts owing by HCP Group continued to be credit-impaired. The Group assessed the lifetime ECL to be recognised, taking into consideration the latest developments on bankruptcy reorganisation of Sincere Property Group based on available information, prevailing market conditions and price trends of corporate bonds issued by other China real estate developers that face similar debt and liquidity challenges as those faced by Sincere Property Group. Based on the assessment undertaken, the amounts owing by HCP Group remained fully impaired as at 31 December 2023. As the bankruptcy reorganisation for Sincere Property Group is ongoing, its outcome is uncertain and evolving. Changes to circumstances and estimates may impact the ECL recognised on the amounts owing by HCP Group. The ECL on the amounts owing by HCP Group is also sensitive to the assumptions used. As the amounts owing by HCP Group has been fully impaired, any decrease in LGD in isolation would result in a higher recoverable amount. Non-trade amounts due from subsidiaries, associates and joint ventures The Group and the Company held non-trade receivables from its associates and joint ventures which were lent to associates and joint ventures to meet their funding requirements. In addition, the Company held non-trade receivables from its subsidiaries which were lent to the subsidiaries to meet their funding requirements. Impairment on these balances has been measured on the 12-month and lifetime expected loss basis. Except as disclosed above, the Group uses an approach that is based on an assessment of qualitative and quantitative factors that are indicative of the risk of default, including but not limited to, financial statements of the entities, and applying credit judgement. The amounts of the allowances on the non-trade amounts due from subsidiaries, associates and joint ventures are set out in notes 7, 8 and 9 respectively. Debt investments The exposure to credit risk for debt investments at the reporting date by geographic region was as follows: At amortised cost Gross amount Lifetime ECL (credit impaired) Carrying amount $’000 $’000 $’000 2024 China 312,501 (312,501) – 2023 China 304,405 (304,405) – ANNUAL REPORT 2024 FINANCIALS 177
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