Page 265 - BAM ONE REPORT 2565 (ENGLISH VERSION)

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Form 56-1 One Report 2022
The increase (decrease) in an allowance for expected credit loss is recognised as an

expenses during the year in profit or loss.

The Company has policy to write-off bad debts when the payment expected not to be collected
from debtors.

4.7 Financial assets with modifications of terms/ Debt restructuring

When a financial asset’ s terms of repayment are renegotiated or modified or debt is

restructured or existing financial assets are replaced with new financial assets because the
debtor is having financial difficulties, the Company assesses whether to derecognise the

financial asset and measures the expected credit loss, as follows:

a) If the modification of terms does not result in derecognition of the financial asset, the
Company calculates the gross carrying value of the new financial asset based on the

present value of the new or modified cash flows, discounted using the original effective
interest rate of the financial asset, and recognises loss on modification of terms in profit
or loss, which presented as a part of expected credit loss.

b) If the modification of terms results in derecognition of the financial asset, the fair value

of the new financial asset is the latest cash flows of the original financial asset as at the
date of derecognition. The difference between the carrying value of the original financial
asset and fair value of the new financial asset is recognised in profit or loss, which

presented as a part of expected credit loss.

In case where loans purchased of receivables with debt restructuring agreement,
the Company continue to treat as purchased or originated credit- impaired receivables.

For installment sale receivables with debt restructuring agreement, if they do not meet the
criteria for derecognition as of the restructuring date they continue to be classified as financial

assets with significant increases in credit risk (stage 2) until the debtor be able to make
payment in accordance with the debt restructuring agreement for not less than 3 months from
the restructuring date, or as financial assets that are credit-impaired (stage 3) until the debtor

be able to make payment in accordance with the debt restructuring agreement for not less
than 12 months from the restructuring date. At that point, they can reclassify as financial
assets with no significant increase in credit risk (stage 1). If those debtors meet the criteria

for derecognition as of the restructuring date, they are also classified as financial assets with
no significant increase in credit risk (stage 1).

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