Annual report 2014

7 Trade receivables

The CWS-boco and ELG Divisions maintain programs for the continual sale of trade receivables to third parties. According to IAS 39, as a rule, these transfers qualify for derecognition of the receivables in question. Nevertheless, the divisions continue to handle the servicing of the receivables sold. In some cases, the division in question also retains a portion of the credit risk, the late payment risk or exchange rate risk from the receivables it sold. Out of EUR 29 million in receivables sold the CWS-boco division recognised at the reporting date an asset of EUR 5 million (previous year: EUR 0 million) as a continuing involvement. A corresponding liability was also recognised in the same amount. The maximum exposure to loss from the sale of receivables as at the reporting date is EUR 7 million (previous year: EUR 7 million).

One factoring program within the ELG division did not lead to a transfer of material credit and interest rate risks to the factoring agent in the previous year so that receivables in the amount of EUR 16 million continued to be recognised. Liabilities to the factoring agent were recognised in the same amount. As in the previous year, no trade receivables are pledged as security for own liabilities at the reporting date.

The table below illustrates the changes in valuation allowances for trade receivables:

EUR million 2014 2013
As at 1 Jan. 15 107
Additions 1 26
Utilisations 9
Reversals 4 11
Foreign currency, changes in the scope of consolidation and other changes -98
As at 31 Dec. 12 15

The valuation allowances contain individual and portfolio-based allowances. The additions to valuation allowances are reported under other operating expenses. Once a bad debt is confirmed, the valuation allowance is utilised. Subsequent cash inflows in respect of written-off receivables are recognised in profit or loss. Reversals of valuation allowances are reported under other operating income. In the previous year, the foreign currency, changes in the scope of consolidation and other changes line item contained disposals in the amount of EUR 99 million in connection with the reclassification of the Celesio division as held for sale.

As at the reporting date, the trade receivables that are past due, but not impaired, are structured as follows:

EUR million 31 Dec. 2014 31 Dec. 2013
Carrying amount of past due, but not impaired receivables 46 33
of which past due for
< 3 months 42 29
3 to 6 months 4 4
> 6 to 12 months
> 12 months

With regard to the receivables that are past due, but not impaired, there is no indication that the debtors will not discharge their payment obligations. The same applies for receivables which are neither past due nor impaired.