24 Trade and other receivables

 

 

 

€ million

2018

2017

Trade receivables

625

583

Less: provision for impairment

-9

-8

Trade receivables – net

616

575

VAT receivable

43

56

Interest receivables

11

10

Prepaid expenses

95

83

Accrued income

0

6

Other receivables

54

63

Royalty receivables

16

16

Trade and other receivables

835

809

 

 

 

The carrying amount of trade and other receivables approximates their fair values. With respect to trade receivables, the fair value is estimated to be the carrying amount less the provision for impairment and for all other receivables the carrying value approximates fair value given the short-term maturity of these amounts.

There is some concentration of credit risk with respect to trade receivables. For some credit exposures in critical countries, such as the Southern European countries, the Group obtained credit insurance. The Group co-operates with dedicated wholesalers in certain countries. The largest outstanding trade receivable in 2018 from a single customer is 18% (2017: 17%) from McKesson Corp. U.S..

The aging analysis of the Group trade receivables at year-end is as follows:

 

 

 

 

 

 

2018

2017

€ million

Gross carrying amounts

Impairment

Gross carrying amounts

Impairment

Not past due

556

0

505

0

Past due – less than one month

43

0

57

-1

Past due more than one month and not more than three months

6

0

6

0

Past due more than three months and not more than six months

4

0

4

0

Past due more than six months and not more than one-year

9

-3

5

-3

Past due more than one-year

7

-6

6

-4

Total

625

-9

583

-8

 

 

 

 

 

Based on historical default rates, the Group believes that no provision for impairment is necessary in respect of trade receivables not past due unless there is a specific indication or evidence of impairment. This concerns 89% (2017: 87%) of the outstanding balance at the balance sheet date.

The movement in the provision for impairment in respect of trade receivables is shown below:

 

 

 

€ million

2018

2017

Balance at 1 January

-8

-6

Impairment charge recognized in the income statement

-1

-5

Utilization / reversal of provision for impairment

-1

3

Effects of movements in exchange rates

1

0

Balance at 31 December

-9

-8

 

 

 

The other classes within trade and other receivables do not contain impaired assets.

The carrying amounts of the Group trade and other receivables are denominated in the following currencies:

 

 

 

€ million

2018

2017

EUR

264

360

USD

318

226

JPY

58

20

GBP

40

42

CNY

30

31

CHF

20

22

KRW

3

9

Other currencies

102

99

Trade and other receivables

835

809

 

 

 

The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable mentioned above.

The Group does not hold any collateral as security.