21. (a) Trade and other receivables

i. Accounting policies for trade and other receivables

Trade receivables are amounts payable by customers for goods sold or services rendered in the ordinary course of business. If the receivables are expected to be settled within twelve months, they are classified as current assets. If this is exceptionally not the case, they are reported as non-current assets. Trade receivables are classified in accordance with IFRS 9. They are generally required to collect the contractual cash flows and are allocated to the “hold” business model accordingly. They are recognized initially at the amount of the unconditional consideration and are subsequently carried at amortized cost using the effective interest method less any impairment losses. If trade receivables contain a significant financing component, they are initially recognized at fair value.

Other receivables mainly include bills of exchange guaranteed by banks (so-called “banker’s acceptance bills”) from trade receivables for customers in China. These financial assets are generally held to collect the contractual cash flows and are therefore classified under the “hold” business model. They are initially recognized at fair value plus transaction costs and subsequently measured at amortized cost using the effective interest method less impairment losses.

For trade receivables, the simplified approach, which is based on the expected credit losses over the respective terms, is used. Loss rates calculated on the basis of historical and forecast data are used, taking into account the business model, the respective customer and the economic environment of the geographical region.

For this purpose, NORMA Group considers in particular the credit default swaps of the respective client’s home countries as well as industry-specific default probabilities derived from external sources. In addition, loss rates from customer-specific credit default swaps (CDS) are used, if available.

Impairment losses on trade receivables, together with impairment losses on contract assets, are recognized in operating profit as net impairment losses. Unused amounts reversed are included in the same line item.

Losses on the disposal of trade receivables through write-offs are recognized in operating profit as impairment losses, net. Unused amounts reversed are included in the same line item.

ii. Disclosures on trade receivables

Trade and other receivables are as follows:

On the balance sheet date, trade receivables were as follows:

iii. Disclosures on valuation allowances on trade receivables

The valuation adjustments with respect to trade receivables were determined as follows as of December 31, 2022:

Impairment losses for trade receivables developed as follows from the opening balance sheet value as of January 1, 2022, to the closing balance sheet value as of December 31, 2022:

The net expense from impairment losses recognized in fiscal year 2022 amounted to EUR 251 thousand (2021: net income of EUR 219 thousand).

The following losses from the write-off of trade receivables arose in the fiscal year:

iv. Fair value of trade receivables

Trade receivables have short-term maturities, therefore the carrying amounts on the balance sheet date correspond to their fair values, as the effects of discounting are not material.