FGV Annual Report 2018

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018 277 01 02 05 03 07 06 04 08 09 ANNUAL INTEGRATED REPORT 2018 EXAMINED OUR NUMBERS 28 AMOUNTS DUE FROM/(TO) A SIGNIFICANT SHAREHOLDER, SUBSIDIARIES, JOINT VENTURES, AN ASSOCIATE AND OTHER RELATED COMPANIES (CONTINUED) (a) Reconciliation of loss allowance (continued) Trade amounts due from joint ventures, a significant shareholder and other related companies using simplified approach The loss allowance for trade amounts due from joint ventures, a significant shareholder and other related companies as at 31 December 2018 reconciles to the opening loss allowance for that provision as follows: Group Non-credit impaired RM’000 Credit impaired RM’000 Total RM’000 At 1 January before restatement – calculated under FRS 139 2,244 7,270 9,514 Amounts restated through opening retained earnings 24,580 (3,368) 21,212 Opening loss allowance as at 1 January 2018 – calculated under MFRS 9 26,824 3,902 30,726 Increase in loss allowance recognised in profit or loss during the year 52,037 8,319 60,356 At 31 December 78,861 12,221 91,082 The following table contains an analysis of the credit exposure trade amounts due from joint ventures, a significant shareholder and other related companies for which an ECL allowance is recognised, based on individual impairment assessment:- Non-credit impaired RM’000 Credit impaired RM’000 Total RM’000 Gross carrying amount 723,953 48,579 772,532 Individual assessment (78,861) (12,221) (91,082) Carrying amount (net of loss allowance) 645,092 36,358 681,450 The significant increase in the loss allowance for the financial year relates to increase of ECL from amount due from a significant shareholder and other related companies as the adverse movement of CPO price during the financial year and the low CPO price forecast are expected to further impact their abilities to settle the amounts due to the Group on a timely manner.