NOTES TO THE FINANCIAL STATEMENTS Year ended 31 December 2025 41 FINANCIAL INSTRUMENTS (CONT’D) (i) Credit risk (cont’d) Impairment losses on trade and other receivables and amounts owing by associates recognised in profit or loss and included in “other operating expenses” were as follows: Group Note 2025 2024 $’000 $’000 Other receivables 32 85 3,220 Trade receivables and accrued receivables 32 8,287 14,515 8,372 17,735 Trade and other receivables and contract assets The Group has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations are performed on all customers requiring credit over a certain amount. The Group limits its exposure to credit risk from trade receivables by collecting deposits as collateral, where possible. For trade receivables and contract assets relating to sale of development properties, if a purchaser defaults on payments, the Group may enforce payments via legal proceedings or if the purchaser is assessed to be insolvent, the Group may take possession of the units, retain a portion of the sales consideration, and resell the property. In monitoring customer credit risk, the Group considers the trade history of the customers with the Group, aging profile, maturity and existence of previous financial difficulties. Exposure to credit risk The maximum exposure to credit risk for trade and other receivables and contract assets at the reporting date by business segment is set out below: Group Company 2025 2024 2025 2024 $’000 $’000 $’000 $’000 Property development 1,552,340 1,891,122 7,966,630 7,222,266 Hotel operations 142,456 169,848 1,503,226 1,485,175 Investment properties 380,839 541,337 4,304,911 3,901,091 Others 188,444 83,598 2,805,425 3,379,335 2,264,079 2,685,905 16,580,192 15,987,867 Expected credit loss assessment on trade receivables The Group uses an allowance matrix to measure the ECL of trade receivables from individual customers, which comprise a very large number of small balances. Loss rates are based on actual credit loss experience over the past 3 years (2024: 3 years). These rates are adjusted to reflect differences between economic conditions during the period over which the historic data has been collected, current conditions and the Group’s view of economic conditions over the expected lives of the receivables. The following table provides information about the exposure to credit risk and ECL for trade receivables and accrued receivables as at reporting date: 196 | CITY DEVELOPMENTS LIMITED
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