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065064
2014 Samsung Electronics Annual Report2014 Samsung Electronics Annual Report
7. Credit Quality of Financial Assets
The credit quality of financial assets that are neither past due nor impaired is as-
sessed by reference to external credit ratings as at December 31, 2014 and 2013,
as follows:
• Superior ability to repay: Aaa-Aa (Moody’s), AAA-AA (S&P, Fitch),
A1
(Credit rating agencies in Korea)
• Strong ability to repay: A (Moody’s), A (S&P, Fitch),
A2
(Credit rating agencies in Korea)
• Acceptable ability to repay: Baa (Moody’s), BBB (S&P, Fitch),
A3
(Credit rating agencies in Korea)
• Currently having the ability to repay: Ba or below (Moody’s),
BB or below (S&P, Fitch),
B or below (Credit rating agencies in Korea)
• Group 1: Customers with the trade payables guaranteed by credit insurance or col-
lateral
• Group 2: Customers having experienced impairment of capital, but, as the trade
payables are guaranteed by credit insurance or collateral, all default risk
has been relieved
(A) Trade receivables (In millions of Korean won)
2014 2013
Counterparties with external credit rating:
Superior ability to repay ₩2,368,544 ₩3,414,467
Strong ability to repay 3,926,159 2,796,881
Acceptable ability to repay 2,812,165 2,491,635
Currently having the ability to repay 3,572,935 4,370,114
Subtotal 12,679,803 13,073,097
Counterparties without external credit
rating:
Group 1 8,978,175 9,429,612
Group 2 223,596 153,770
Subtotal 9,201,771 9,583,382
Total ₩21,881,574 ₩22,656,479
(B) Cash equivalents and short-term financial instruments
(In millions of Korean won)
2014 2013
Superior ability to repay ₩3,808,656 ₩2,584,121
Strong ability to repay 52,949,611 49,891,037
Acceptable ability to repay 1,726,291 493,383
Currently having the ability to repay 4,311 1,111
Other126,123 23,376
Total ₩58,514,992 ₩52,993,028
1 Short-term financial instruments held at financial institutions (such as Credit unions) without
an external credit rating.
8. Transfer of Financial Assets
Trade receivables of the Group have been discounted through factoring agreements
with banks in 2014 and 2013. Collateral (trade receivables and other) provided in
such factoring transactions do not meet the requirements for asset derecognition as
risks and rewards are not substantially transferred in the event the debtor defaults.
Financial liabilities recognized in relation to these transactions are included as
short-term borrowings on the statement of financial position (Note 15).
The following table presents a breakdown of discounted trade receivables as at
December 31, 2014 and 2013: (In millions of Korean won)
2014 2013
Carrying amount of the discounted trade
receivables1
₩4,661,384 ₩3,256,935
Carrying amount of
the related borrowings
4,661,384 3,256,935
1 The discounted trade receivables include intercompany balances.