Annual Report 2020

NOTESTOTHE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2020 136 The United Laboratories International Holdings Limited Annual Report 2020 39. FINANCIAL INSTRUMENTS (Continued) Financial risk management objectives and policies (Continued) Credit risk and impairment assessment (Continued) The Group’s internal credit risk grading assessment comprises the following categories: Internal credit rating Description Trade receivables Other financial assets Low risk Low risk types customers represent the counterparty has a low risk default and no material past-due amounts Lifetime ECL – not credit-impaired 12m ECL Normal risk Normal risk types customers represent debtors frequently repays after due dates but usually settle in full Lifetime ECL – not credit-impaired Lifetime ECL – not credit-impaired High risk High risk types customers represent there have been significant increases in credit risk since initial recognition through information developed internally or external resources Lifetime ECL – not credit-impaired Lifetime ECL – not credit-impaired Loss There is evidence indicating the asset is credit- impaired Lifetime ECL – credit-impaired Lifetime ECL – credit-impaired Write-off There is evidence indicating that the debtor is in severe financial difficulty and the Group has no realistic prospect of recovery Amount is written off Amount is written off