Page 283 - TSMC 2019 Annual Report

9. NOTES AND ACCOUNTS RECEIVABLE, NET
At amortized cost
Notes and accounts receivable Less: Loss allowance
At FVTOCI
$
46,188,113 (319,045)
45,869,068 3,255,865
$
$ 36,685,389
December 31, 2019
December 31, 2018
33,097,452 (7,132)
33,090,320 3,595,069
$ 49,124,933
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
December 31, 2018
$ 29,258,313
6,956,366 464,879 7,548 5,415
(7,132) $ 36,685,389
$
(319,045) $ 49,124,933
43,374,378
6,054,771 10,864 720 3,245
All of the Company’s accounts receivable classified as at FVTOCI were not past due. Movements of the loss allowance for accounts receivable
Balance,beginningofyear Provision (Reversal)
Balance,endofyear
2019
$ 7,132 311,913
$ 319,045
2018
$ 224,352 (217,220)
$ 7,132
Years Ended December 31
For the years ended December 31, 2018 and 2019, 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.
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