Rex International Holding Limited 2 3 5 NOTES TO THE FINANCIAL STATEMENTS 37 FINANCIAL INSTRUMENTS (CONTINUED) Credit risk (continued) Credit-impaired financial assets At each reporting date, the Group assesses whether financial assets carried at amortised cost are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit-impaired includes the following observable data: • significant financial difficulty of the debtor; • breach of contract such as a default or being more than 90 days past due; • the restructuring of a loan or advance by the Group on terms that the Group would not consider otherwise; • it is probable that the debtor will enter bankruptcy or other financial reorganisation; or • the disappearance of an active market for a security because of financial difficulties. Presentation of allowance for ECLs in the statements of financial position Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of these assets. Trade receivables and contract assets The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the demographics of the Group’s customer base, including the default risk of the industry and country in which customers operate, as these factors may have an influence on credit risk. Details of concentration of revenue are included in Note 30 to the financial statements. Concentrations of credit risk exist when economic or industry factors similarly affect a group of counterparties, and when the aggregate amount of this exposure is significant in relation to the Group’s total credit exposure. In 2024, the Group’s most significant counter-party is Repsol in relation to the decommissioning receivables of US$110,352,000. In 2023, the Group’s most significant counter-parties are the Norwegian government which accounts for US$5,627,000 and Repsol in relation to the decommissioning receivables of US$145,481,000. At the reporting date, the Group had no other significant concentrations of credit risk for its financial assets. The Group does not require collateral in respect of its trade and other receivables, except for a guarantee granted in LPA’s favour for the decommissioning receivables (Note 10). The Group does not have trade receivables for which no loss allowance is recognised because of collateral.
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