Credit risk related to accounts receivables

12 Months Ended

Mar. 31, 2020

As of March 31, 2019 and 2020, the aging analysis of accounts receivables is as follows (in thousands):


			Gross			Allowance for doubtful accounts			Net
2019
Not past due	$	12,455		$	(74)		$	12,381
Past due by 1 to 30 days	4,935			(131)			4,804
Past due by 31 to 60 days	1,831			(74)			1,757
Past due by more than 60 days	4,543			(2,440)			2,103
Total	$	23,764		$	(2,719)		$	21,045


			Gross			Allowance for doubtful accounts			Net
2020
Not past due	$	11,670		$	(366)		$	11,304
Past due by 1 to 30 days	7,309			(321)			6,988
Past due by 31 to 60 days	2,799			(158)			2,641
Past due by more than 60 days	5,924			(2,757)			3,167
Total	$	27,702		$	(3,602)		$	24,100

The movements in the allowance for doubtful accounts are as follows (in thousands):


	As of March 31,
	2019			2020

Opening balance		$	1,482		$	2,719
Adjustment on initial application of ASU 2016-13*					301
Opening balance – restated		1,482			3,020
Bad debt provision		2,098			3,941
Write-offs, net of recoveries**		(572)			(2,655)
Foreign currency translation differences		(289)			(704)
Closing balance		$	2,719		$	3,602

* Comparatives have not been restated

** Amounts written off are not subject to enforcement activity.

From April 1, 2019 the Company measures the allowance for doubtful accounts at an amount equal to lifetime expected credit losses as a result of the adoption of ASU 2016-13. Under legacy GAAP, the allowance for doubtful accounts was determined on an incurred loss basis wherein a loss was considered to have been incurred when there was objective evidence of impairment as a result of one or more loss events that had incurred.

The measurement of expected credit losses is a function of the probability of default, loss given default (i.e. the magnitude of the loss if there is default) and the exposure at default. The assessment of the probability given default and loss given default is based on historical data adjusted by relevant forward-looking information. The exposure at default is represented by the asset’s gross carrying amount at the reporting date.

The Company considers a default to have occurred when a receivable is more than 90 days past due or information determined internally or obtained from external sources indicates that the customer is unlikely to pay its creditors, including the Company, in full. Amounts provided are generally written off when there is no expectation of recovering the amount, in accordance with the Company’s write-off policy.

Overview of the Company’s exposure to credit risk from customers

The maximum exposure to credit risk at the reporting date is the carrying value of each receivable and loan to external parties, net of impairment losses where relevant. As of March 31, 2019 and 2020, other than 15% of the gross accounts receivables relating to four debtors, and 16% of the gross accounts receivables relating to four debtors, respectively, the Company has no significant concentration of credit risk, due to its spread of customers across various operations and geographical locations.

The Company does not hold any collateral as security.

Net accounts receivables as of March 31, 2019 and 2020 of $1.8 million and $2.9 million, respectively, are pledged as security for the Company’s overdraft facilities.