Page 174 - Thailand Post Annual Report 2024

Part 1
Overview of the Organization
Part 2
Business Trends
Part 3
Business Model
Part 4
Strategies and Resource Allocation
Part 5
Risk
Part 6
Corporate Governance
Part 7
Operating Results
Part 8
Other Information
Cost of postal products in the type of boxes and envelopes is determined by the moving average method.
Cost of collectibles, definitive postage stamps, postage stamps for collection purpose, miscellaneous goods, and souvenirs is calculated by the first-in, first-out (FIFO) method.
The Group provides allowance for devaluation of inventories for the goods which are deteriorated, damaged, obsolete and remain in stock for too long.
3.5 Financial instruments
Financial assets and financial liabilities are recognized in the Group’s consolidated statement of financial position when the Group becomes a party to the contractual terms of a financial instrument.
Financial assets
All recognized financial assets are measured subsequently at either amortized cost or fair value, depending on the classification of the financial assets.
Classification of financial assets
Debt instruments that meet the conditions to be measured subsequently at amortized cost :
• The financial asset held within a business model whose objective is to hold financial assets in order to collect
contractual cash flows; and
• The contractual terms of the financial asset which gives rise to cash flows that are solely payments of principal
and interest on the principal amount outstanding on specified dates.
Debt instruments that meet the conditions to be measured subsequently at fair value through other comprehensive income :
• The financial asset held within a business model whose objective is to collect contractual cash flows and sell
the financial assets; and
• The contractual terms of the financial asset which gives rise to cash flows that are solely payments of principal
and interest on the principal amount outstanding on specified dates.
All other financial assets are measured subsequently at fair value through profit or loss.
Impairment of financial assets
The Group recognizes a loss allowance for expected credit losses on investments in debt instruments that are measured at amortized cost or at fair value through other comprehensive income, and for trade account receivables. The amount of expect credit losses is remeasured at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument.
The Group always recognizes an allowance for lifetime expected credit losses for trade account receivables. The expected credit losses on these financial assets are estimated using a provisioning schedule based on the Group’s historical credit loss experience, adjusted with factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate.
Lifetime expected credit losses represent the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month expected credit losses represent the portion of lifetime expected credit losses that are expected to result from default events on a financial instrument that may possibly occur within 12 months after the reporting date.
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Thailand Post Company Limited