Page 214 - TSMC 2019 Annual Report

The Company assesses the 12-month expected credit loss and lifetime expected credit loss based on the probability of default and loss given default provided by external credit rating agencies. The current credit risk assessment policies are as follows:
Category
Performing Doubtful
In default Write-off
Description
Credit rating on trade date and valuation date:
(1) Within investment grade (2) Between BB+ and BB- Credit rating on trade date and
valuation date:
(1) From investment grade to non-
investment grade
(2) From BB+~BB- to B+~CCC- Credit rating CC or below
There is evidence indicating that the debtor is in severe financial difficulty and the Company has no realistic prospect of recovery
Basis for Recognizing Expected Credit Loss
12 months expected credit loss
Lifetime expected credit loss-not credit impaired
Lifetime expected credit loss-credit impaired
Amount is written off
Expected Credit Loss Ratio
0-0.1% -
-
-
For the years ended December 31, 2019 and 2018, the expected credit loss increases NT$655 thousand and decreases NT$1,040 thousand, respectively. The changes are mainly due to investment portfolio adjustment.
e. Liquidity risk management
The objective of liquidity risk management is to ensure the Company has sufficient liquidity to fund its business operations over the next 12 months. The Company manages its liquidity risk by maintaining adequate cash and cash equivalent, debt investment at FVTPL, financial assets at FVTOCI-current, and financial assets amortized at cost-current.
The table below summarizes the maturity profile of the Company’s financial liabilities based on
contractual undiscounted payments, including principal and interest.
December 31, 2019 Non-derivative financial liabilities
Short-term loans
Accounts payable (including related
parties)
Payables to contractors and
equipment suppliers
Accrued expenses and other current
liabilities
Bonds payable
Lease liabilities (including those
classified under accrued expenses
and other current liabilities) Guarantee deposits (including those classified under accrued expenses
and other current liabilities)
$
Less Than 1 Year
118,562,641
40,205,966
140,810,703
45,760,898 32,338,853
2,475,177
1,552,977 381,707,215
1-3 Years 3-5 Years
$- $-
- -
- -
- -
7,777,715 18,203,601 2,782,860 2,484,478
121,047 55,501 10,681,622 20,743,580
More Than 5 Years
$ - - - -
-
10,947,730
356 10,948,086
Total
$ 118,562,641 40,205,966 140,810,703 45,760,898
58,320,169
18,690,245
1,729,881 424,080,503
(Continued)
- 64 -