# 4 FINANCIAL RISK MANAGEMENT (Continued)

# (a) Financial risk factors (Continued)

# (i) Credit risk (Continued)

# Trade receivables

The Group’s trade receivables have been grouped into categories for shared credit risk characteristics:

– primary properties market transactions

– other transactions

For trade receivables from primary properties market transactions, the counterparties are primarily large corporations and have strong financial position and management considers the credit risk is close to zero.

For trade receivables from other transactions, the counterparties are primarily individuals. When there is objective evidence that individual trade receivable is impaired, the loss allowances for these trade receivables is assessed and measured at an amount equal to lifetime expected credit losses.

For the remaining trade receivables from other transactions which no objective evidence is available without undue cost to measure the lifetime expected credit loss, the Group applies the HKFRS 9 simplified approach to measure expected credit losses which uses a lifetime expected loss allowance for these trade receivables collectively.

To measure the expected credit losses, these trade receivables have been grouped based on the days past due and the sectors of the transacted properties (i.e. commercial properties, shops and industrial properties).

The expected loss rates are based on the latest completed historical payment profile of sales over a period of 12 month and the corresponding historical credit losses experienced within that period. The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of the customers to settle the receivables, if any.

# 4 FINANCIAL RISK MANAGEMENT (Continued)

# (a) Financial risk factors (Continued)

# (i) Credit risk (Continued)

# Trade receivables (Continued)

On these basis, the loss allowances for trade receivables as at 31 December 2020 and 31 December 2019 were determined as follows:

# As at 31 December 2020

<table><tr><td rowspan="3"></td><td rowspan="2">Expected
loss rate</td><td rowspan="2">Gross
carrying
amount</td><td colspan="3">Loss allowance</td></tr><tr><td>Individually
assessed</td><td>Collectively
assessed</td><td> Total</td></tr><tr><td>%</td><td> HK$’000</td><td> HK$’000</td><td> HK$’000</td><td> HK$’000</td></tr><tr><td>Current (not yet due)</td><td>4.5%-15.0%</td><td>81,268</td><td>(460)</td><td>(4,138)</td><td>(4,598)</td></tr><tr><td>Less than 30 days past due</td><td>0.8%-7.7%</td><td>10,854</td><td>(75)</td><td>(597)</td><td>(672)</td></tr><tr><td>31-60 days past due</td><td>3.7%-19.0%</td><td>3,006</td><td> –</td><td>(405)</td><td>(405)</td></tr><tr><td>61-90 days past due</td><td>7.9%-31.0%</td><td>2,163</td><td>(1,345)</td><td>(56)</td><td>(1,401)</td></tr><tr><td>More than 90 days past due</td><td>13.0%-100%</td><td>29,329</td><td>(24,021)</td><td>(4,665)</td><td>(28,686)</td></tr><tr><td></td><td></td><td>126,620</td><td>(25,901)</td><td>(9,861)</td><td>(35,762)</td></tr></table>

# As at 31 December 2019

<table><tr><td rowspan="3"></td><td rowspan="2">Expected
loss rate</td><td rowspan="2">Gross
carrying
amount</td><td colspan="3">Loss allowance</td></tr><tr><td>Individually
assessed</td><td>Collectively
assessed</td><td> Total</td></tr><tr><td>%</td><td> HK$’000</td><td> HK$’000</td><td> HK$’000</td><td> HK$’000</td></tr><tr><td>Current (not yet due)</td><td>3.6%-6.2%</td><td>75,912</td><td>(893)</td><td>(2,955)</td><td>(3,848)</td></tr><tr><td>Less than 30 days past due</td><td>0.4%-5.5%</td><td>10,303</td><td>(96)</td><td>(245)</td><td>(341)</td></tr><tr><td>31-60 days past due</td><td>1.3%-13.9%</td><td>3,729</td><td>(1,601)</td><td>(363)</td><td>(1,964)</td></tr><tr><td>61-90 days past due</td><td>2.4%-19.6%</td><td>2,369</td><td> –</td><td>(375)</td><td>(375)</td></tr><tr><td>More than 90 days past due</td><td>36.0%-100%</td><td>27,449</td><td>(17,104)</td><td>(8,884)</td><td>(25,988)</td></tr><tr><td></td><td></td><td>119,762</td><td>(19,694)</td><td>(12,822)</td><td>(32,516)</td></tr></table>

Note: The customers are obliged to settle the amounts due upon the completion of or pursuant to the terms and conditions of the relevant agreements. The loss allowance provided for trade receivables not yet due includes the credit risk arising from bad debts and fallen through transactions. The loss allowance provided for overdue trade receivables includes only the credit risk arising from bad debts.