| 4.3. | Trade and other receivables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business. The repayment terms of trade receivables vary between 21 days and 90 days from date of invoice. Interest charged on overdue accounts varies between the prime rate and a rate of 18%, depending on the contract terms. Trade receivables are recognised initially at the transaction price, unless they contain significant financing components, in which case they are recognised at fair value. Other receivables generally arise from transactions outside the usual operating activities of the Group. Other receivables include sundry debtors, staff bursaries and staff loans. Other receivables increased at Company level mainly due to the Openserve carve-out. Certain interdivisional other receivables would have been eliminated before the carve-out within Telkom Company as it related to business units within the Company. Post the carve-out, these balances are not eliminated at Company level, resulting in an increase in the overall balance.
Trade receivables are written off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, among others, the failure of a debtor to engage in a repayment plan with the Group and failure to make contractual payments that are based on the agreed arrangement period. The increase in the impairment of trade receivables is largely as a result of the deterioration of the debtor's book in Telkom Company due to constrained consumer disposable income. Refer to note 7.1.4 for a detailed credit risk analysis. |
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