Notes and Accounts Receivable, Net

12 Months Ended

Dec. 31, 2019

12.	NOTES AND ACCOUNTS RECEIVABLE, NET


	December 31, 2018			December 31, 2019
	NT$			NT$
	(In Millions)			(In Millions)
At amortized cos t
Notes and accounts receivable	$	125,025.6		$	135,978.0
Less: Loss allowance		(7.3	)		(325.3	)


		125,018.3			135,652.7
At FVTOCI		3,595.1			3,255.9


	$	128,613.4		$	138,908.6

The Company signed a contract with the bank to sell certain accounts receivable without recourse and transaction cost required. These accounts receivable are classified as at FVTOCI because they are held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets.

2017

In principle, the payment term granted to customers is due 30 days from the invoice date or 30 days from the end of the month of when the invoice is issued. The allowance for doubtful receivables is assessed by reference to the collectability of receivables by performing the account aging analysis, historical experience and current financial condition of customers.

Except for those impaired, for the rest of the notes and accounts receivable, the account aging analysis at the end of the reporting period is summarized in the following table. There was no impairment concern for the accounts receivable that were past due without recognizing a specific allowance for doubtful receivables since there was no significant change in the credit quality of its customers after the assessment and the Company has obtained guarantee against certain receivables.

Movements of the allowance for doubtful receivables


	Individually Assessed for Impairment			Collectively Assessed for Impairment			Total
	NT$			NT$			NT$
	(In Millions)			(In Millions)			(In Millions)
Balance at January 1, 201 7	$	1.8		$	478.3		$	480.1
Reversal/Write-off		(1.8	)		(6.3	)		(8.1	)
Effect of exchange rate changes		—			(0.2	)		(0.2	)


Balance at December 31, 2017	$	—		$	471.8		$	471.8

2018 and 2019

In principle, the payment term granted to customers is due 30 days from the invoice date or 30 days from the end of the month when the invoice is issued. Aside from recognizing impairment loss for credit-impaired accounts receivable, the Company recognizes loss allowance based on the expected credit loss ratio of customers by different risk levels with consideration of factors of historical loss ratios and customers’ financial conditions, competitiveness and business outlook. For accounts receivable past due over 90 days without collaterals or guarantees, the Company recognizes loss allowance at full amount.

Aging analysis of notes and accounts receivable


	December 31, 2018			December 31, 2019
	NT$			NT$
	(In Millions)			(In Millions)
Not past du e	$	113,126.5		$	126,134.8
Past due
Past due within 30 days		15,006.5			13,082.1
Past due 31-60 days		472.8			12.8
Past due 61-120 days		9.5			1.0
Past due over 121 days		5.4			3.2
Less: Loss allowance		(7.3	)		(325.3	)


	$	128,613.4		$	138,908.6

All of the Company’s accounts receivable classified as at FVTOCI were not past due.

Movements of the loss allowance for accounts receivable


	Years Ended December 31
	2018			2019
	NT$			NT$
	(In Millions)			(In Millions)
Balance, beginning of yea r	$	227.0		$	7.3
Provision (Reversal)		(219.7	)		318.2
Effect of exchange rate changes		—			(0.2	)


Balance, end of year	$	7.3		$	325.3

For the years ended December 31, 2018 and 2019, the changes in loss allowance were mainly due to the variations in the expected credit loss ratios and the balance of accounts receivable of different risk levels.