36. FINANCIAL INSTRUMENTS AND FINANCIAL RISKS (CONTINUED) Credit risk (Continued) Trade receivables and contract assets (Continued) A loss allowance of $2,423,000 (2023: $2,726,000) related to trade receivables and contract assets was recognised for trade receivables and contract assets. Management believes that no impairment allowance is necessary for the remaining trade receivables and contract assets as these are well known customer and government agencies, with good collection track record and no recent history of default, hence the expected credit loss is not material. Retention sum The Group has assessed expected credit loss allowance for remaining retention sum based on 12-month expected credit loss model. The Group’s impaired retention sum as at 30 September 2024 amounted to $3,669,000 (2023: $3,860,000). The impaired retention sum related to customers who had indicated that they were not likely to repay the outstanding balances due to economic circumstances or who have defaulted in payment terms. Management is of the view that loss allowance on remaining retention sum is insignificant. Non-trade amounts due from third parties The Group has assessed expected credit loss for non-trade amounts due from third parties based on 12-month expected credit loss model. The expected credit loss of these receivables has recognised at $1,720,000 (2023: $1,447,000). Non-trade amounts due from joint ventures In determining the recoverability of receivable from the joint ventures, the Group considers the financial performance of the joint ventures. The expected credit loss of these receivables has recognised at $1,254,000 (2023: $1,254,000). Non-trade amounts due from joint operation In determining the recoverability of receivable from the joint operation, the Group considers the financial performance of the joint operation. The expected credit loss of these receivables has remained unchanged at $1,324,000 (2023: $1,324,000). Non-trade amounts due from associates For non-trade amounts due from associates, the Group and the Company have taken into account the financial strength and financial performance of the associates. The Group and the Company monitor and assess at each reporting date for any indicator of significant increase in credit risk on the amounts due from associates, by considering their financial performance. At the end of the reporting period, the Group and the Company have assessed the associates’ financial performance to meet the contractual cash flow obligations and have recognised an expected credit loss allowance of $815,000 and $Nil (2023: $1,564,000 and $722,000) for non-trade amounts due from associates respectively (Note 19). Non-trade amounts due from subsidiaries For non-trade amounts due from subsidiaries and the amounts due from subsidiaries which formed part of the Company’s net investment in subsidiaries, the Board of Directors has taken into account information that available internally about these subsidiaries’ past, current and expected operating performance and cash flow position. The Board of Directors monitors and assesses at each reporting date of any indicator of significant increase in credit risk on the amount due from the respective subsidiaries, by considering their financial performance and results. At the end of the reporting period, the Company has assessed its subsidiaries financial performance to meet the contractual cash flow obligations and has recognised expected credit loss allowance of $Nil (2023: $Nil) for non-trade amounts due from subsidiaries (Note 19). 130 KEONG HONG HOLDINGS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2024
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