AUB Group Limited Annual Report 2023

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 30 JUNE 2023

11

TRADE AND OTHER RECEIVABLES (CONTINUED)

As at 30 June 2022

Later than 1 year and not later than 5 years $’000

6 months to no later than 1 year $’000

Later than 5 years/ No maturity $’000

Due not later than 6 months $’000

Total $’000

Trade receivables

24,414

–

45

–

24,459

Amount due from customers on broking/agency operations Amount due from clients in respect of premium funding

74,967

–

–

–

74,967

1,018

873

–

– – – –

1,891

Related party receivables

14,279

– –

694

14,973

Prepayments and other receivables Total trade and other receivables

2,128

–

2,128

116,806

873

739

118,418

Expected Credit Losses (ECL) For trade receivables and other receivables, an allowance is made for anticipated losses based upon historical information, adjusted for forward-looking information, and specific credit information of counterparties where available. Amounts over due by more than (a) Brokers - 30 days, (b) Support services entities and Underwriters - 90 days and (c) Wholesale brokers - 180 days are considered to have a significance increase in credit risk. Expected credit losses are recorded on receivables, including trade and other receivables, interest-bearing loan assets, investments and other financial assets. The Group applies the simplified approach to its trade receivables, and measures the loss allowance at an amount equal to lifetime expected credit losses. For amounts due from customers of broking/agency operations and amounts due from clients in respect of premium funding operations, an allowance is made for anticipated lapses and cancellations based upon historical information, adjusted for forward-looking information. ECL allowance included in trade and other receivables (current) above using the simplified approach as follows: The provision for lapses 5.0% (2022: 5.0%) provides an amount for expected cancellations and loss of commissions and fees (amounts due from broking/agency operations, debtors) based on Group wide historic data. Australian Agencies provision at 50% for debtors over 90 days, and 100% for debtors over 120 days in line with their binding arrangements to generally cancel policies past due by 90 days. Commercial loans to controlled entities and associates are secured over the shares of the non AUB Group shareholders of the borrower. Other related party loans are generally provided to a related party for purchase of shares in a controlled entity or associate, where the shares acquired form collateral in the loan deed. All other loans and receivables, including intercompany and short-term loans to controlled entities and associates are unsecured. The valuation of shares held as security exceed the total loans receivable for the years ended 30 June 2023 and 30 June 2022. The Group recognises under AASB 15 a deferred component of Revenue representing the significant risk of reversal on issued policies. This is within the Group’s Deferred Revenue balance within the Consolidated Statement of Financial Position. In addition to requirements under AASB 15, forward looking elements under ECL provisioning is required. This is presented in the table above, along with ECL provisioning on assets not impacted by AASB 15. As such changes in forward looking elements of ECL provisioning have an impact on the table below.

2023 $’000

2022 $’000

Opening balance 1 July

316

2,792

ECL from acquisition of a controlled entity

3,780 1,100 5,196

103

Movements during the year Total Expected Credit Loss

(2,579)

316

AUB GROUP ANNUAL REPORT 2023

107