3.1 Trade receivables Trade receivables are generally due within a payment period of between 30 to 90 days. Due to the short-term nature, their carrying amount is considered to be the same as their fair value.
| | | | | | | | | | | | | | | | | (CHF in millions) | | 12/31/2023 | | 12/31/2022 | | | | | | | | | | | | | | | Not yet due | | 158.8 | | | 112.3 | | | | Past due 1 - 90 days | | 42.2 | | | 47.3 | | | | Past due 91 - 180 days | | 8.0 | | | 14.8 | | | | Past due 181 - 360 days | | 6.7 | | | 7.3 | | | | Past due > 361 days | | 2.4 | | | 2.0 | | | | Gross Carrying Amount | | 218.1 | | | 183.7 | | | | | | | | | | Individual loss allowance | | (12.6) | | | (8.2) | | | | Expected credit loss | | (0.7) | | | (0.9) | | | | Loss allowance | | (13.3) | | | (9.1) | | | | Trade receivables | | 204.8 | | | 174.6 | | |
Certain trade receivables have been pledged as collateral in relation to debt financing, refer to 5.4 Liquidity risk.
The recorded loss allowance for trade receivables reconciles as follows:
| | | | | | | | | | | | | | | | | (CHF in millions) | | 2023 | | 2022 | | | | | | | | | | | | | | | Individual loss allowance at January 1 | | 8.2 | | | 2.0 | | | | Addition | | 6.1 | | | 6.3 | | | | Usage | | (1.1) | | | — | | | | Release | | (0.2) | | | 0.0 | | | | Exchange differences | | (0.4) | | | (0.1) | | | | Individual loss allowance at December 31 | | 12.6 | | | 8.2 | | |
| | | | | | | | | | | | | | | | | (CHF in millions) | | 2023 | | 2022 | | | | | | | | | | | | | | | Expected credit loss at January 1 | | 0.9 | | | 0.6 | | | | Income statement (release) / addition for the year | | (0.2) | | | 0.3 | | | | | | | | | | Expected credit loss at December 31 | | 0.7 | | | 0.9 | | |
Refer to 5.3 Credit risk for additional information. | | | | | | | Accounting policies | Trade receivables represent On’s right to an amount of consideration that is unconditional and only a passage of time is required before payment of the consideration is due.
Trade receivables are initially recorded at original invoice amount and subsequently measured at amortized cost less loss allowance calculated based on the expected credit loss (ECL) model. On applies the simplified approach to measure credit losses, which uses a lifetime expected loss allowance for trade receivables. This approach considers historical credit loss experience as well as future expectations.
Trade receivables are written off when there is no reasonable expectation of recovery. The charges to the income statement are included in selling, general and administrative expenses. |
| | | | | | | Relevant judgments and accounting estimates | Expected credit losses (ECL’s) on trade receivables are calculated based on historical loss rates per region and adjusted by forward-looking quantitative and qualitative adjusted by forward-looking quantitative and qualitative information such as the global economy outlook (real GDP growth). In addition, appraisals and data used by the internal planning department are taken into consideration.
Individual allowances and write-offs (partially or fully) on trade receivables are applied if there are objective indications for missing collectability such as legal procedures, insolvency or bankruptcy. |
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