Page 251 - E-BOOK

(1) NPLs with debt restructuring or debt compromise agreements

The Company recognised interest income when payment is received from the
debtors based on the individual rate of return approach, whereby the rate of return
is calculated on the basis of the projected cash flows from each acquired receivable,

with reference to the debt restructuring or compromise agreements. In cases where
an agreement required assets to be transferred to settle debt, the Company’ s

estimate the value of the assets to be transferred as the projected cash inflow for
the purpose of calculating the individual rate of return. However, if the debt
restructuring agreement required the auction of a collateral asset, the Company did

not include the estimated receipt in the cash flow projection due to uncertainty
regarding the value to be received.

The Company recognised interest income, which was calculated based on the

overdue period from the date of execution of the debt restructuring or compromise
agreement or from the date of the latest receipt of payment to the date payment was
received, using the rate of return mentioned above. The amount of interest income

recognised was not to exceed the amount of payment received from the debtor, with
any difference after the recognition of interest income to be deducted from the 249
principal amount of loans purchased of receivables.

(2) NPLs without debt restructuring or compromise agreements

Debt settlement received from a debtor under any circumstances (cash received
from a debtor as settlement or receipts from the auction of collateral assets) was

fully deducted from the principal. When the amount received exceeded the cost of Bangkok Commercial Asset Management Public Co., Ltd.
loans purchased of receivables, the difference was presented as gain on
receivables. The Company recognised these items as described below:

- When cash was received from the debtor, the income was recognised on the

date the payment was received.

- If collateral of a debtor was put up for auction by the Legal Execution
Department, the Company recorded the reduction of debt on the date when the

buyer completed making payment to the Legal Execution Department and
recorded the accrued income from the auction sale by the Legal Execution
Department as an account receivable.