24 Trade and other receivables

24 Trade and other receivables

 

 

 

€ million

2019

2018

Trade receivables

700

625

Less: provision for impairment

−14

−9

Trade receivables – net

686

616

VAT receivable

40

43

Interest receivables

12

11

Prepaid expenses

129

95

Accrued income

0

0

Other receivables

62

54

Royalty receivables

21

16

Trade and other receivables

950

835

 

 

 

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 2019 from a single customer is 15% (2018: 18%) from McKesson Corp. U.S.

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

 

 

 

 

 

 

2019

2018

€ million

Gross carrying amounts

Impairment

Gross carrying amounts

Impairment

Not past due

669

0

556

0

Past due – less than one month

7

0

43

0

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

9

0

6

0

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

0

0

4

0

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

4

−5

9

−3

Past due more than one-year

11

−9

7

−6

Total

700

−14

625

−9

 

 

 

 

 

Based on historical default rates, the Group believes that no provision for impairment is necessary in respect of trade receivables not past due. This concerns 96% (2018: 89%) 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

2019

2018

Balance at 1 January

−9

−8

Impairment charge recognized in the income statement

−4

−1

Utilization/reversal of provision for impairment

0

−1

Effects of movements in exchange rates

−1

1

Balance at 31 December

−14

−9

 

 

 

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

2019

2018

EUR

296

264

USD

359

318

JPY

66

58

GBP

57

40

CNY

39

30

CHF

14

20

KRW

9

3

Other currencies

110

102

Trade and other receivables

950

835

 

 

 

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.