Page 187 - TSMC 2019 Annual Report

The Company signed a contract with the bank to sell certain accounts receivable without recourse and transaction cost required. These accounts receivable are classified as at FVTOCI because they are held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets.
In principle, the payment term granted to customers is due 30 days from the invoice date or 30 days from the end of the month when the invoice is issued. Aside from recognizing impairment loss for credit-impaired accounts receivable, the Company recognizes loss allowance based on the expected credit loss ratio of customers by different risk levels with consideration of factors of historical loss ratios and customers’ financial conditions, competitiveness and business outlook. For accounts receivable past due over 90 days without collaterals or guarantees, the Company recognizes loss allowance at full amount.
Aging analysis of notes and accounts receivable
Not past due Past due
Past due within 30 days Past due 31-60 days Past due 61-120 days Past due over 121 days
Less: Loss allowance
December 31, 2019
$ 126,134,762
13,082,080 12,794 1,033 3,245
(325,325) $ 138,908,589
December 31, 2018
$ 113,126,484
15,006,461 472,833 9,451 5,415
(7,253) $ 128,613,391
All of the Company’s accounts receivable classified as at FVTOCI were not past due. Movements of the loss allowance for accounts receivable
Years Ended December 31
Balance,beginningofyear Provision (Reversal)
Effect of exchange rate changes
Balance, end of year
$
2019
7,253 318,290
2018
$ 226,968 (219,714) (1)
$ 7,253
(218) $ 325,325
For the years ended December 31, 2019 and 2018, the changes in loss allowance were mainly due to the variations in the expected credit loss ratios and the balance of accounts receivable of different risk levels.
12. INVENTORIES
Finished goods
Work in process
Raw materials
Supplies and spare parts
December 31, 2019
December 31, 2018
$
$
8,924,541 51,969,105 16,552,275
5,535,275 82,981,196
$
11,329,802 72,071,861 15,233,877
4,595,436 $ 103,230,976
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