Page 114 - ACC One Report 2567-En

114
Annual Report 2024 (Form 56-1 One Report)
Advanced Connection Corporation Public Company Limited
16
ADVANCED CONNECTION CORPORATION PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2024
Derecognition of financial instruments
A financial asset is derecognized when the rights to receive the cash flows from the asset have expired, or when the rights to receive the cash flows from the asset have been transferred, including the transfer of nearly all the risks and rewards of the asset, or when control of the asset has been transferred, even if the risks and rewards of the asset have not been transferred or retained.
The group derecognizes a financial liability when the obligation under the liability has been discharged, canceled, or has expired. In cases where an existing financial liability is replaced by a new liability with substantially different terms from the original, or when the terms of an existing liability are modified significantly, it is considered a derecognition of the original liability and the recognition of a new liability, with the difference in carrying amounts recognized in profit or loss.
Impairment of financial assets
The Group recognizes an allowance for expected credit losses (“ECLs”) for all debt instruments not held at FVTPL. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate.
For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12 – months. For those credit exposures for which there has been a significant increase in credit risk since initial recognition, The group measures the loss amount as the expected credit loss over the remaing life of the financial instrument.
The Group considers a significant increase in credit risk to have occurred when contractual payments are more than 30 days past due and considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, the Group may also consider a financial asset to have a significant increase in credit risk and to be in default using other internal or external information, such as credit rating of issuers.
The Group applies a simplified approach in calculating ECLs for trade receivables and contract assets Therefore, the Group does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date. It is based on its historical credit loss experience and adjusted for forward – looking factors specific to the debtors and the economic environment.
A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows.
Offsetting of financial instruments
Financial assets and financial liabilities are offset, and the net amount is reported in the statement of financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.