Company: GVH
Filing Date: 2025-02-12
Form Type: 20-F
Source: 0001493152-25-006117
Chunk: 208

Company: Globavend Holdings Ltd
Filing Date: 2025-02-12
Form: 20-F
Item: Item 11
Chunk 208
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ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Credit Risk
 
On October 1, 2020, we adopted ASC 326. We estimate expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by us. Assets that potentially subject the Company to a significant concentration of credit risk primarily consist of cash, accounts receivable, deposits and prepayment and contract assets. The Company has designed their credit policies with an objective to minimize their exposure to credit risk.

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Our exposure to credit risk, which will cause a financial loss to us due to failure to discharge an obligation by the counterparties, relates primarily to our bank deposits (including our own cash at banks), accounts receivable, deposits and prepayment and contract assets. We consider the maximum exposure to credit risk equals to the carrying amount of these financial assets in the consolidated statement of financial position. As of September 30, 2024, the cash balance of $2,296,462 was substantially maintained at financial institutions in Hong Kong.
 
We believe that there is no significant credit risk associated with cash, which was held by reputable financial institutions in the jurisdictions where we and our subsidiaries are located.
 
Credit risks associated with account receivables, deposits and prepayment and contract assets are typically accounted for by creating an allowance for expected credit losses. Credit risks are mitigated by performing ongoing credit evaluations of customers’ financial condition. We have adopted a credit policy of dealing with creditworthy counterparties to mitigate the credit risk from defaults. We estimate the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current risk characteristics.
 
Foreign Currency Risk
 
We are a global provider of integrated cross-border logistics services and air freight forwarding services and our functional currency is the Hong Kong dollars. Most of our transactions during the periods presented in this annual report are denominated in Hong Kong dollars, Australian dollars and New Zealand dollars. Historically, our principal exposure to foreign currency fluctuations is mainly with respect to our expenses incurred denominated in Australian dollars and New Zealand dollars. For the years ended September 30, 2022, 2023 and 2024, we incurred approximately 47.7%, 54.