XML 32 R14.htm IDEA: XBRL DOCUMENT v3.19.1
TRADE AND OTHER ACCOUNTS RECEIVABLE CURRENT, AND NON-CURRENT ACCOUNTS RECEIVABLE
 12 Months Ended
Dec. 31, 2018
Trade and other receivables [abstract]  
TRADE AND OTHER ACCOUNTS RECEIVABLE CURRENT, AND NON-CURRENT ACCOUNTS RECEIVABLE

NOTE 8 - TRADE AND OTHER ACCOUNTS RECEIVABLE CURRENT, AND NON-CURRENT ACCOUNTS RECEIVABLE

 

    As of     As of  
    December 31,     December 31,  
    2018     2017  
    ThUS$     ThUS$  
             
Trade accounts receivable     1,077,561       1,175,796  
Other accounts receivable     188,393       133,054  
Total trade and other accounts receivable     1,265,954       1,308,850  
Less: Allowance for impairment loss     (97,991 )     (87,909 )
Total net trade and accounts receivable     1,167,963       1,220,941  
Less: non-current portion – accounts receivable     (5,381 )     (6,891 )
Trade and other accounts receivable, current     1,162,582       1,214,050  

 

The fair value of trade and other accounts receivable does not differ significantly from the book value.

 

The maturity of the portfolio as of December 31, 2017 is as follows:

 

Up to date     1,040,671  
Matured accounts receivable, but not impaired        
Expired from 1 to 90 days     34,153  
Expired from 91 to 180 days     10,141  
More than 180 days overdue (*)     2,922  
Total matured accounts receivable, but not impaired     47,216  
         
Matured accounts receivable and impaired Judicial, pre-judicial collection and protested documents     43,175  
Debtor under pre-judicial collection process and portfolio sensitization     44,734  
Total matured accounts receivable and impaired     87,909  
Total     1,175,796  

 

(*) Value of this segment corresponds primarily to accounts receivable that were evaluated in their ability to recover, therefore not requiring a provision.

 

As of December 31, 2018, in order to determine the expected credit losses, the company groups accounts receivable for passenger and cargo transportation; depending on the characteristics of shared credit risk and maturity.

 

    Portfolio maturity        
          from 1 to     from 91 to     from 181 to     more of        
    Up to date     90 days     180 days     360 days     360 days     Total  
    ThUS$     ThUS$     ThUS$     ThUS$     ThUS$     ThUS$  
Expected loss rate (1)     3 %     5 %     45 %     65 %     76 %     9 %
Gross book value (2)     888,930       91,387       11,085       15,078       71,081       1,077,561  
Impairment loss provision     (23,933 )     (5,014 )     (4,983 )     (9,864 )     (54,197 )     (97,991 )

 

(1) Corresponds to the expected average rate.

(2) the gross book value represents the maximum growth risk value of trade accounts receivable.

 

Currency balances that make up the Trade and other accounts receivable and non-current accounts receivable are the following:

 

    As of     As of  
    December 31,     December 31,  
Currency   2018     2017  
    ThUS$     ThUS$  
             
Argentine Peso     82,893       49,958  
Brazilian Real     511,174       635,894  
Chilean Peso     118,546       90,302  
Colombian peso     7,259       3,249  
Euro     49,044       48,286  
US Dollar     110,312       257,324  
Other currency (*)     288,735       135,928  
Total     1,167,963       1,220,941  
                 
(*) Other currencies                
Australian Dollar     100,733       40,303  
Chinese Yuan     5,106       37  
Danish Krone     475       197  
Pound Sterling     18,129       5,068  
Indian Rupee     7,163       3,277  
Japanese Yen     56,589       18,756  
Norwegian Kroner     283       133  
Swiss Franc     5,046       2,430  
Korean Won     31,381       18,225  
New Taiwanese Dollar     6,180       2,983  
Other currencies     57,650       44,519  
Total     288,735       135,928  

 

The movements of the provision for impairment losses of the Trade Debtors and other accounts receivable are as follows:

 

          Adoption                    
    Opening     adjustment           (Increase)     Closing  
    balance     IFRS 9 (*)     Write-offs     Decrease     balance  
Periods   ThUS$     ThUS$     ThUS$     ThUS$     ThUS$  
From January 1 to December 31, 2016     (60,072 )     -       20,910       (37,892 )     (77,054 )
From January 1 to December 31, 2017     (77,054 )     -       8,249       (19,104 )     (87,909 )
From January 1 to December 31, 2018     (87,909 )     (10,524 )     8,620       (8,178 )     (97,991 )

 

(*) Adjustment to the balance as of December 31, 2017 registered in retained earnings as of 01.01.2018 for the adoption of IFRS 9.

 

Once pre-judicial and judicial collection efforts are exhausted, the assets are written off against the allowance. The Company only uses the allowance method rather than direct write-off, to ensure control.

 

The historical and current renegotiations are not very relevant and the policy is to analyze case by case to classify them according to the existence of risk, determining if their reclassification corresponds to pre-judicial collection accounts.

 

The maximum credit-risk exposure at the date of presentation of the information is the fair value of each one of the categories of accounts receivable indicated above.

 

    As of December 31, 2018     As of December 31, 2017  
    Gross exposure     Gross     Exposure net     Gross exposure     Gross     Exposure net  
    according to     impaired     of risk     according to     Impaired     of risk  
    balance     exposure     concentrations     balance     exposure     concentrations  
    ThUS$     ThUS$     ThUS$     ThUS$     ThUS$     ThUS$  
                                     
Trade accounts receivable     1,077,561       (97,991 )     979,570       1,175,796       (87,909 )     1,087,887  
Other accounts receivable     188,393       -       188,393       133,054       -       133,054  

  

There are no relevant guarantees covering credit risk and these are valued when they are settled; no materially significant direct guarantees exist. Existing guarantees, if appropriate, are made through IATA.