Note 17 Trade receivables

All amounts in SEKm unless otherwise stated

Trade receivables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method, less provision for impairment. Changes in the provision are recognized as selling expenses in the income statement. The Group’s policy is to reserve 50% of trade receivables that are 6 months past due but less than 12 months, and to reserve 100% of receivables that are 12 months past due and more. If the provision is considered insufficient due to individual consideration such as bankruptcy, officially known insolvency, etc., the provision should be extended to cover the extra anticipated losses.

Provisions for impairment of receivables

The fair value of trade receivables equals their carrying amount as the impact of discounting is not significant. Electrolux has a significant credit exposure on a number of major customers, primarily in the US, Latin America and Europe. Receivables concentrated to customers with credit limits amounting to SEK 300m or more represent 32.0% (29.0) of the total trade receivables. The creation and usage of provisions for impaired receivables have been included in selling ­expenses in the income statement. The increase in new provison is mainly related to the increased credit risk within the private label business.

Timing analysis of trade receivables past due