NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2022 (CURRENCY - SINGAPORE DOLLARS UNLESS OTHERWISE STATED) C14 Financial risk management objectives and policies (continued) Exposure to credit risk As at 31 December 2022, 18% (2021: 20%) of trade receivables and contract assets relate to three major customers of the Group. The table below analyses the trade receivables and contract assets by the Group’s main reportable segments: Carrying amount Group 2022 $’000 2021 $’000 Commercial Aerospace 785,325 625,110 Urban Solutions & Satcom 1,118,256 853,762 Defence & Public Security 1,359,586 1,315,923 3,263,167 2,794,795 A summary of the Group’s exposures to credit risk for trade receivables and contract assets is as follows: 2022 2021 2020 Group Not credit impaired $’000 Credit impaired $’000 Not credit impaired $’000 Credit impaired $’000 Not credit impaired $’000 Credit impaired $’000 Receivables measured at lifetime ECL: Trade receivables and contract assets 3,263,167 70,751 2,794,795 82,811 2,605,149 104,648 Loss allowance – (70,751) – (82,811) – (104,648) Total 3,263,167 – 2,794,795 – 2,605,149 – Expected credit loss assessment Trade receivables and contract assets For specific trade receivables and contract assets identified by the Group to be credit impaired, the Group recognised a loss allowance equal to lifetime expected credit loss (ECL). Hence, the recoverability of these balances are assessed separately from the allowance matrix. For the remaining trade receivables and contract assets, the Group uses an allowance matrix to measure the ECL of trade receivables and contract assets from its customers. Loss rates are calculated using a ‘roll rate’ method based on the probability of a receivable progressing through successive stages of delinquency to writeoff. Roll rates are calculated separately for exposures in different segments based on the common credit risk characteristics. In calculating the ECL rates, the Group considers historical loss rates for each category of customers and adjusts to reflect current and forward-looking macroeconomic factors affecting the ability of the customers to settle the receivables. Based on this assessment, the Group has concluded that the ECLs from these trade receivables and contract assets are immaterial. CORPORATE OVERVIEW PERFORMANCE REVIEW SUSTAINABILITY FINANCIAL REPORT 193
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