Singapore Airlines 2008 Annual Report Download - page 152

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Singapore Airlines Annual Report 2007-08
150
37 Financial Risk Management Objectives and Policies (continued)
(g) Credit risk (continued)
There are no significant concentrations of credit risk other than on derivative counterparties where transactions are
limited to financial institutions possessing high credit quality and hence the risk of default is low.
The sale of passenger and cargo transportation is largely achieved through IATA accredited sales agents. The credit risk
of such sales agents is relatively small owing to a broad diversification. In specific instances, the contract may require
special collateral.
Unless expressly stated otherwise in the contract, receivables and payables among airlines are settled either bilaterally
or via the IATA Clearing House. Receivables and payables are generally netted and settled at weekly intervals, which
lead to a clear reduction in the risk of default.
For all other service relationships, depending on the nature and scope of the services rendered, collateral is required,
credit reports or references are obtained and use is made of historical data from previous business relations, especially
with regard to payment behaviour, in order to avoid non-performance.
Collaterals requested from debtors include bank guarantees, cash-in-lieu of deposit and security deposits.
Allowance is made for doubtful accounts whenever risks are identified.
38 Financial Instruments (in $ million)
(a) Classification of financial instruments
Financial assets and financial liabilities are measured on an ongoing basis either at fair value or at amortised cost.
The principal accounting policies in Note 2 describe how the classes of financial instruments are measured, and how
income and expenses, including fair value gains and losses, are recognised. The following table analyses the financial
assets and liabilities in the balance sheet by the class of financial instrument to which they are assigned, and therefore
by the measurement basis:
Available-for- Derivatives Financial
Loans and sale financial used for liabilities at
receivables assets hedging amortised cost Total
2008
The Group
Assets
Long-term investments - 43.3 - - 43.3
Other non-current assets 361.8 - - - 361.8
Trade debtors 1,593.9 - 449.9 - 2,043.8
Deposits and other debtors 73.1 - - - 73.1
Amounts owing by associated companies 0.5 - - - 0.5
Investments - 464.3 - - 464.3
Cash and bank balances 5,119.0 - - - 5,119.0
Total financial assets 7,148.3 507.6 449.9 - 8,105.8
Total non-financial assets 18,409.4
Total assets 26,515.2
Liabilities
Deferred credit - - - 470.0 470.0
Notes payable - - - 1,100.0 1,100.0
Loans - - - 4.0 4.0
Finance lease commitments - - - 552.7 552.7
Amounts owing to associated companies - - - 1.2 1.2
Trade and other creditors - - 171.2 3,061.9 3,233.1
Total financial liabilities - - 171.2 5,189.8 5,361.0
Total non-financial liabilities 5,525.3
Total liabilities 10,886.3
NOTES TO THE FINANCIAL STATEMENTS
31 March 2008