Key figures

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 are subsequently carried at amortized cost using the effective interest method less impairment.

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:

Trade and other receivables

T122

Dec 31, 2024

Dec 31, 2023

154,430

178,203

5,004

6,304

159,434

184,507

On the reporting date, trade receivables were as follows:

Trade receivables

T123

Dec 31, 2024

Dec 31, 2023

156,473

179,974

-2,043

-1,771

154,430

178,203

iii. Disclosures on valuation allowances on trade receivables

The valuation adjustments with respect to trade receivables that are not measured at fair value through profit or loss were determined as follows as of December 31, 2024:

Credit risk on trade receivables

T124

Credit loss rate

< 1%

Credit loss rate

> 1% < 2.5%

Credit loss rate

> 2.5%

Total

69,589

65,381

3,076

138,046

922

995

126

2,043

68,667

64,386

2,950

136,003

Credit loss rate

< 1%

Credit loss rate

> 1% < 2.5%

Credit loss rate

> 2.5%

Total

45,829

99,202

2,261

147,292

470

1,175

125

1,771

45,359

98,027

2,136

145,521

Impairment losses for trade receivables developed as follows from the opening balance as of January 1, 2024, to the closing balance as of December 31, 2024:

Impairment reconciliation

T125

Impairments on trade receivables

1,771

1,854

-1,616

-21

55

2,043

The net expense from impairment losses recognized in the fiscal year 2024 amounted to EUR 238 thousand (2023: net income in the amount of EUR 164 thousand).

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

Gains/losses arising from derecognition IFRS 7.20A

T126

2024

2023

Reasons for derecognition

3,689

2,594

Write-off (IFRS 9.5.4.4)

iv. Fair value of trade receivables

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

i. Transferred trade receivables

Legend

These contents are part of the Non-financial Group Report and were subject to a separate limited assurance examination.