Trade Receivables, Net

12 Months Ended

Dec. 31, 2022

10.	TRADE RECEIVABLES, NET


	December 31
	2021		2022
	NT$		NT$		US$ (Note 4)

At amortized cost
Gross carrying amount	$	109,473,101	$	109,408,693	$	3,560,322
Less: Allowance for impairment loss		103,353		164,408		5,350

		109,369,478		109,244,285		3,554,972
At FVTOCI		6,092,462		5,402,714		175,812


	$	115,462,210	$	114,646,999	$	3,730,784

Trade receivables

At amortized cost

The Group’s average credit terms granted to the customers were 30 to 90 days. The Group evaluates the risk and probability of credit loss of trade receivables by reference to the Group’s past experiences, financial condition of each customer, impact of

COVID-19,

as well as competitive advantage and future development of the industry in which the customer operates. The Group then reviews the recoverable amount of each individual trade receivable at each balance sheet date to ensure that adequate allowance is made for possible irrecoverable amounts. In this regard, management believes the Group’s credit risk was significantly reduced.

The Group measures the loss allowance for trade receivables at an amount equal to lifetime ECLs. The expected credit losses on trade receivables are estimated using a provision matrix by reference to past default experience of the debtor and an analysis of the debtor’s current financial position, adjusted for general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecast direction of economic conditions at each balance sheet date. As the Group’s historical credit loss experience shows significantly different loss patterns for different customer segments, the provision matrix for expected credit loss allowance based on trade receivables due status is further distinguished according to the Group’s different customer base.

The Group writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery. For trade receivables that have been written off, the Group continues to engage in enforcement activity to attempt to recover the receivables due. Where recoveries are made, these are recognized in profit or loss.

The following table details the loss allowance of trade receivables based on the Group’s provision matrix.

December 31, 2021


	Not Past Due			Overdue 1 to 30 days			Overdue 31 to 90 Days			Overdue Over 91 Days			Individually Impaired			Total
	NT$			NT$			NT$			NT$			NT$			NT$

Expected credit loss rate		0 %			0%-10 %			0%-70 %			1%-100 %			0%-100 %

Gross carrying amount	$	105,538,390		$	3,136,438		$	609,695		$	99,118		$	89,460		$	109,473,101
Loss allowance (Lifetime ECLs)		(18,062	)		(1,811	)		(22,785	)		(46,337	)		(14,358	)		(103,353	)


	$	105,520,328		$	3,134,627		$	586,910		$	52,781		$	75,102		$	109,369,748

December 31, 2022


	Not Past Due			Overdue 1 to 30 days			Overdue 31 to 90 Days			Overdue Over 91 Days			Individually Impaired			Total
	NT$			NT$			NT$			NT$			NT$			NT$

Expected credit loss rate		0 %			0%-10 %			0%-70 %			1%-100 %			0%-100 %

Gross carrying amount	$	102,857,157		$	4,765,548		$	1,413,656		$	294,937		$	77,395		$	109,408,693
Loss allowance (Lifetime ECLs)		(20,445	)		(1,778	)		(47,752	)		(70,133	)		(24,300	)		(164,408	)


	$	102,836,712		$	4,763,770		$	1,365,904		$	224,804		$	53,095		$	109,244,285



	Not Past Due			Overdue 1 to 30 days			Overdue 31 to 90 Days			Overdue Over 91 Days			Individually Impaired			Total
	US$ (Note 4)			US$ (Note 4)			US$ (Note 4)			US$ (Note 4)			US$ (Note 4)			US$ (Note 4)

Expected credit loss rate		0 %			0%-10 %			0%-70 %			1%-100 %			0%-100 %

Gross carrying amount	$	3,347,125		$	155,078		$	46,002		$	9,598		$	2,519		$	3,560,322
Loss allowance (Lifetime ECLs)		(665	)		(58	)		(1,554	)		(2,282	)		(791	)		(5,350	)


	$	3,346,460		$	155,020		$	44,448		$	7,316		$	1,728		$	3,554,972

The movements of the loss allowance of trade receivables were as follows:


	December 31
	2020			2021			2022
	NT$			NT$			NT$		US$ (Note 4)

Balance at January 1	$	136,497		$	97,358		$	103,353	$	3,363
Remeasurement of loss allowance		(55,742	)		17,078			59,490		1,936
Reclassification		(6,970	)		—			—		—
Acquisition through business combinations		32,460			—			—		—
Amounts written off		(3,944	)		(399	)		—		—
Disposal of subsidiaries		—			(4,637	)		—		—
Effects of foreign currency exchange differences		(4,943	)		(6,047	)		1,565		51


Balance at December 31	$	97,358		$	103,353		$	164,408	$	5,350

At FVTOCI

For the trade receivables due from certain customers, the Group decides whether or not to factor these trade receivables to banks without recourse based on the Group’s demand of working capital. These trade receivables are classified as at FVTOCI because they are held within a business model whose objective is achieved by both the collection of contractual cash flows and the selling of financial assets.

The following table details the loss allowance of trade receivables at FVTOCI based on the Group’s provision matrix.


December 31, 2021
	Not Past Due		Overdue 1 to 30 days		Overdue 31 to 90 Days		Overdue Over 91 Days		Individually Impaired		Total
	NT$		NT$		NT$		NT$		NT$		NT$

Expected credit loss rate		0 %		0 %		0 %		0 %		—

Gross carrying amount	$	5,991,543	$	9,415	$	91,493	$	11	$	—	$	6,092,462
Loss allowance (Lifetime ECLs)		—		—		—		—		—		—


	$	5,991,543	$	9,415	$	91,493	$	11	$	—	$	6,092,462

December 31, 2022
	Not Past Due		Overdue 1 to 30 days		Overdue 31 to 90 Days		Overdue Over 91 Days		Individually Impaired		Total
	NT$		NT$		NT$		NT$		NT$		NT$

Expected credit loss rate		0 %		0 %		0 %		0 %		—

Gross carrying amount	$	5,291,410	$	22,221	$	83,767	$	5,316	$	—	$	5,402,714
Loss allowance (Lifetime ECLs)		—		—		—		—		—		—


	$	5,291,410	$	22,221	$	83,767	$	5,316	$	—	$	5,402,714


	Not Past Due		Overdue 1 to 30 days		Overdue 31 to 90 Days		Overdue Over 91 Days		Individually Impaired		Total
	US$ (Note 4)		US$ (Note 4)		US$ (Note 4)		US$ (Note 4)		US$ (Note 4)		US$ (Note 4)

Expected credit loss rate		0 %		0 %		0 %		0 %		—

Gross carrying amount	$	172,190	$	723	$	2,726	$	173	$	—	$	175,812
Loss allowance (Lifetime ECLs)		—		—		—		—		—		—


	$	170,190	$	723	$	2,726	$	173	$	—	$	175,812

At FVTPL

Some of the Group’s subsidiaries sell all of their trade receivables to banks without recourse. The sale will result in the derecognition of these trade receivables because the Group’s subsidiaries will transfer substantially all risks and rewards to banks. These trade receivables are measured at FVTPL because the objective of those subsidiaries’ business model is neither the collecting of contractual cash flows nor the collecting of contractual cash flows and the selling of financial assets. As of December 31, 2022, the trade receivables at FVTPL were all factored to banks without recourse.

Transfers of financial assets

The followings were the Group’s outstanding trade receivables transferred but not yet due:

Counterparty

Receivables

Factoring

Proceed

Reclassified

to Other

Receivables

Advances

Received-

Unused

Advances

Received-

Used

Annual

Interest Rates

on Advances

Received (%)

December 31, 2021

BNP Paribas

EUR

12,115

EUR

12,081

EUR

11,475

EUR

0.80

First Commercial Bank

NT$

8,565

NT$

—

NT$

—

NT$

8,565

1.95

December 31, 2022

BNP Paribas

EUR

23,600

EUR

18,283

EUR

17,103

EUR

5,317

0.80

Pursuant to the factoring agreements, losses from commercial disputes (such as sales returns and discounts) are borne by the Group, while losses from credit risk are borne by banks. As of December 31, 2021, the Group’s issued promissory notes with aggregate amounts of US$2,000

thousand to Citibank Taiwan Ltd. for possible commercial disputes. As of the date that the consolidated financial statements were authorized for issue by the management, the Group did not have a material commercial dispute and also expected to have no material commercial dispute in the foreseeable future.