Other assets and liabilities

12 Months Ended

Dec. 31, 2018

Subclassifications of assets, liabilities and equities [abstract]

Trade receivables

Millicom’s trade receivables mainly comprise interconnect receivables from other operators, postpaid mobile and residential cable subscribers, as well as B2B customers. The nominal value of receivables adjusted for impairment approximates the fair value of trade receivables.



	2018		2017
	(US$ millions)
Gross trade receivables	592		597
Less: provisions for expected credit losses	(249	)	(211	)
Trade receivables, net	343		386

Aging of trade receivables



	Neither past due nor impaired	Past due (net of impairments)
	Neither past due nor impaired	30–90 days	>90 days	Total
	(US$ millions)
2018:
Telecom operators	17	9	14	39
Own customers	158	69	19	246
Others	36	17	5	58
Total	210	95	37	343
2017:
Telecom operators	29	16	4	49
Own customers	186	52	34	273
Others	43	16	5	64
Total	259	83	43	386

Trade receivables are initially recognized at fair value and subsequently measured at amortized cost using the effective interest method, less provision for expected credit losses. The Group recognizes an allowance for expected credit losses (ECLs) applying a simplified approach in calculating the ECLs. Therefore, the Group does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime of ECLs at each reporting date. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment. The provision for expected credit losses is recognized in the consolidated statement of income within Cost of sales.

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for those maturing more than 12 months after the end of the reporting period. These are classified within non-current assets. Loans and receivables are carried at amortized cost using the effective interest method. Gains and losses are recognized in the statement of income when the loans and receivables are derecognized or impaired, as well as through the amortization process.

Inventories

Inventories are stated at the lower of cost and net realizable value. Cost is determined using the first-in, first-out method. Net realizable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.

Inventories



	2018	2017
	(US$ millions)
Telephone and equipment	26	28
SIM cards	4	6
IRUs	3	3
Other	6	9
Inventory at December 31,	39	45

Trade payables

Trade payables are initially recognized at fair value and subsequently measured at amortized cost using the effective interest method where the effect of the passage of time is material.

From time to time, the Group enters into agreements to extend payment terms with various suppliers, and with factoring companies when such payments are discounted. The corresponding amount pending payment as of December 31, 2018, is recognized in Trade payables for an amount of $26 million (2017: $25 million).

Current and non-current provisions and other liabilities

Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, if it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognized as a separate asset, but only when the reimbursement is virtually certain.

The expense relating to any provision is presented in the statement of income net of any reimbursement. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, risks specific to the liability. Where discounting is used, increases in the provision due to the passage of time are recognized as interest expenses.

Current provisions and other liabilities

Current



	2018	2017
	(US$ millions)
Deferred revenue(i)	85	86
Customer deposits	15	13
Current legal provisions	27	24
Tax payables	68	57
Customer and MFS distributor cash balances	147	144
Withholding tax on payments to third parties	17	17
Other provisions	7	1
Other current liabilities(ii)	128	83
Total	494	425


(i)	Deferred revenue has partly been reclassified to Contract Liabilities as a result of the adoption of IFRS 15. See the 'Accounting Policy Changes' note.


(ii)	In the caption "Other current liabilities", for 2018 $38 million of provision for tax risk not related to income tax is included.

Non-current provisions and other liabilities

Non-current



	2018	2017
	(US$ millions)
Non-current legal provisions	8	15
Long-term portion of asset retirement obligations	77	69
Long-term portion of deferred income on tower sale and leasebacks	85	73
Long-term employment obligations	68	76
Accruals and payables in respect of spectrum and license acquisitions	41	31
Other non-current liabilities	71	70
Total	351	335

Assets and liabilities related to contract with customers

Contract assets, net



	2018
	(US$ millions)
Long-term portion	3
Short-term portion	35
Less: provisions for expected credit losses	(1	)
Total	37

Contract liabilities



	2018
	(US$ millions)
Long-term portion	1
Short-term portion	86
Total	87

The Group recognised revenue for $45 million in 2018 that was included in the contract liability balance at the beginning of the year.

The transaction price allocated to the remaining performance obligations (unsatisfied or partially unsatisfied) as at December 31, 2018 is $42 million ($41 million is expected to be recognized as revenue in the 2020 financial year and the remaining $1 million in the 2021 financial year or later) (i).


(i)	This amount does not consider contracts that have an original expected duration of one year or less, neither contracts in which consideration from a customer corresponds to the value of the entity’s performance obligation to the customer (i.e. billing corresponds to accounting revenue).

Contract costs, net (i)



	2018
	(US$ millions)
Net at January 1	4
Contract costs capitalized	4
Amortization of contract costs	(4	)
Net at December 31	4


(i)	Incremental costs of obtaining a contract are expensed when incurred if the amortization period of the asset that Millicom otherwise would have recognized is one year or less.