Notes to the Financial Statements PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the financial statements For the year ended 31 December 2023 22 (d.5) Impairment of financial assets other than trade accounts receivables The Group assesses ECLs by reviewing credit ratings of the financial assets unless there has been a significant increase in credit risk of the financial instrument since initial recognition or creditimpaired financial assets, the loss allowance is measured at an amount equal to lifetime ECLs. In determining allowance of expected credit loss, the financial asset is considered to have low credit risk and no significant incremental of credit risk since initial recognition. The Group will not recognise any allowance of expected credit loss. (d.6) Write offs The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of recovering. Subsequent recoveries of an asset that was previously written off, are recognised as a reversal of impairment in profit or loss in the period in which the recovery occurs. (d.7) Interest Interest income and expense is recognised in profit or loss using the effective interest method. In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amortised cost of the liability. (e) Cash and cash equivalents Cash and cash equivalents are cash on hand and all types of deposits at bank and financial institutions with original maturity of three months or less from the date of acquisition, excluding deposits at banks used as collateral (if any). (f) Trade accounts receivable A trade receivable is recognised when the Group has an unconditional right to receive consideration. A trade receivable is measured at transaction price less allowance for expected credit loss. Bad debts are written off when incurred. The Group estimates lifetime expected credit losses (ECLs), using a provision matrix to find the ECLs rates. This method groups the debtors based on shared credit risk characteristics and past due status, taking into account historical credit loss data, adjusted for factors that are specific to the debtors and an assessment of both current economic conditions and forward-looking general economic conditions at the reporting date. (g) Inventories Inventories are measured at the lower of cost and net realisable value. Cost is calculated using the weighted average cost principle. Cost includes direct costs incurred in acquiring the inventories. In the case of manufactured inventories and work-in-progress, cost includes an appropriate share of production overheads based on normal operating capacity. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs to complete and to make the sale. Provision is made for obsolete and slow-moving of finished goods, raw materials, factory supplies and spare parts based on the items that are obsoleted and expected to be unsalable. 266
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