Expected credit loss on trade receivables

The ageing analysis of trade receivables and expected credit losses is as follows:

Recognition and measurement

Trade and other receivables are recognised initially at contractual amounts due and are subsequently stated at amortised cost using the effective interest method, less allowances for lifetime expected credit losses.

Critical accounting estimate - Expected credit loss

In accordance with AASB 9, the Company applies the ‘simplified approach’ when measuring expected credit losses. This approach requires the calculation of a lifetime expected loss allowance for trade receivables. Expected credit losses on trade receivables are estimated by using a provision matrix with reference to historical credit loss experience and then applying an adjustment for forward-looking estimates. The Group categorises its trade receivables based on ageing. Loss rates are estimated in each customer segment, including by age category, fuel type and customer status and are based on the probability of a receivable progressing through to a write-off. The impact of economic factors is considered in assessing the likelihood of recovery from customers. Economic factors include the direction of conditions both general and specific to the industry (e.g. customer churn).