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Notes to the
financial statements
For the financial year ended 31 December 2018
96
B A K E R T E C H N O L O G Y
L I M I T E D
3.
Significant accounting judgements and estimates (cont’d)
(b)
Provision for expected credit losses of trade receivables
The Group uses a provisionmatrix to calculate expected credit loss (ECL) for trade receivables.
The provision rates are based on days past due for groupings of various customer segments
that have similar loss patterns.
The provision matrix is initially based on the Group’s historical observed default rates. The
Group will calibrate the matrix to adjust historical credit loss experience with forward–looking
information. At every reporting date, historical default rates are updated and changes in the
forward–looking estimates are analysed.
The assessment of the correlation between historical observed default rates, forecast
economic conditions and ECLs is a significant estimate. The amount of ECLs is sensitive to
changes in circumstances and of forecast economic conditions. The Group’s historical credit
loss experience and forecast of economic conditions may also not be representative of
customer’s actual default in the future. The information about the ECLs on the Group’s trade
receivables is disclosed in Note 18.
The carrying amount of trade receivables as at 31 December 2018 is $21,323,000
(2017: $1,702,000).
4.
Segment information
For management purposes, the Group is organised into business units based on their products and
services, and has three reportable operating segments as follows:
(i)
The marine offshore segment is essentially the Group’s principal business activity as
manufacturers and providers of specialised marine offshore equipment and services for the
oil and gas industry. The Group’s core business is in the design, construction, operating and
chartering of mobile offshore units and offshore services vessels, along a wide range of
critical equipment and components for the offshore marine industry.
(ii)
The investments segment relates to the Group’s investments in available-for-sale investments.
(iii) The corporate segment is involved in Group-level corporate services and treasury functions.
Except as indicated above, no operating segments have been aggregated to form the above
reportable operating segments.
Management monitors the operating results of its business units separately for the purpose of
making decisions about resource allocation and performance assessment. Segment performance is
evaluated based on operating profit or loss which in certain respects, as explained in the following
table, is measured differently from operating profit or loss in the consolidated financial statements.
Transfer prices between operating segments, if any, are on arm’s length basis in a manner similar to
transactions with third parties.