Note 23 – Accounts receivable and other receivables

Accounting principles

Duni recognizes accounts receivable at amortized cost, pursuant to IFRS 9. The following requirements must be met for Duni to classify its financial assets at amortized cost:

  1. the asset is part of a business model with the goal of collecting contractual cash flows, and
  2. the contract terms create cash flows that solely consist of capital and interest on the outstanding capital at specific points in time.

Duni measures future expected credit losses related to investments in debt instruments measured at amortized cost or fair value with changes through other comprehensive income based on forward-looking information. The Group chooses the provision method based on whether or not a material increase in credit risk has occurred. In accordance with the rules of IFRS 9, the Group applies a simplified method for impairment testing of accounts receivable. As a result of the simplification, the provision for expected credit losses is calculated based on the risk of loss for the entire term of the receivable and is recognized upon initial recognition of the receivable.

Group Parent Company
SEK m 2019 2018 2019 2018
  Koncernen Moderbolaget
MSEK  2019 2018  2019 2018
Accounts receivable Kundfordringar 915 921 113 121
Receivables from Group companies Fordringar hos koncernföretag – – 36 33
Other receivables Övriga fordringar 155 136 17 12
Short-term financial receivables, from Group companies Kortfristiga finansiella fordringar hos koncernföretag – – 132 140
Total accounts receivable and other receivables Summa kundfordringar och andra fordringar 1,070 1,057 298 306

Other receivables above relate to:

Group Parent Company
SEK m 2019 2018 2019 2018
  Koncernen Moderbolaget
MSEK  2019 2018  2019 2018
Receivables from suppliers Fordringar på leverantörer 8 8 – –
VAT receivable Momsfordran 85 79 17 12
Factoring Factoring 9 8 – –
Other receivables Övriga fordringar 53 41 – 0
Total other receivables Summa övriga fordringar 155 136 17 12

Credit exposure:

Group Parent Company
SEK m 2019 2018 2019 2018
  Koncernen Moderbolaget
MSEK  2019 2018  2019 2018
Accounts receivable neither overdue nor impaired Kundfordringar ej förfallna eller nedskrivna 770 806 106 108
Accounts receivable overdue but not impaired Kundfordringar förfallna men ej nedskrivna 102 106 6 13
Impaired accounts receivable Kundfordringar nedskrivna 61 25 1 2
Provision for bad debts Reserv för osäkra kundfordringar -18 -16 -1 -2
Total accounts receivable Totalt kundfordringar 915 921 113 121

The credit risk associated with accounts receivable that are neither overdue nor impaired is not considered to be large. 43% (2018: 31%) of total accounts receivable that are neither overdue nor impaired have a rating of AA or higher. SEK 47 m of this category belongs to subsidiary BioPak Pty in Australia and these accounts receivable are covered by credit insurance. Due to the geographical spread, the history Duni possesses regarding its customers, and the improbability of all customers encountering payment difficulties at the same time, Duni sees no reason for impairment in this category. No individual account receivable exceeds 4.7% (2018: 4.4%) of the total accounts receivable that are neither overdue nor impaired. Regarding credit risks and exposures, see Note 33.

Aging of accounts receivable overdue but not impaired:

Group Parent Company
SEK m 2019 2018 2019 2018
  Koncernen Moderbolaget
MSEK  2019 2018  2019 2018
Less than 1 month Mindre än 1 månad 87 75 6 12
1-3 months 1-3 månader 12 25 1 1
3-6 months 3-6 månader 2 4 0 –
More than 6 months Mer än 6 månader 1 1 – –
Total Summa 102 106 6 13

On December 31, 2019, provisions for bad debts amounted to SEK 18 m (2018: 16). The individually assessed receivables which are deemed to be in need of impairment relate primarily to wholesalers who have unexpectedly encountered financial difficulties. It has been assessed that some of the receivables are expected to be recoverable.

Aging of impaired accounts receivable:

Group Parent Company
SEK m 2019 2018 2019 2018
  Koncernen Moderbolaget
MSEK  2019 2018  2019 2018
Less than 3 months Mindre än 3 månader 44 12 1 0
3-6 months 3-6 månader 3 4 0 0
More than 6 months Mer än 6 månader 14 10 1 2
Total Summa 61 25 1 2

Specification of reserve for bad debts:

Group Parent Company
SEK m 2019 2018 2019 2018
  Koncernen Moderbolaget
MSEK  2019 2018  2019 2018
At beginning of year Vid årets ingång 16 15 2 2
Provisions for bad debts Reservering för osäkra fordringar 5 5 0 1
Receivables written off during the year Fordringar som skrivits bort under året -2 -3 -1 -1
Reversed non-utilized amount Återförda outnyttjade belopp -2 -2 0 –
Exchange differences Valutakursdifferenser 0 0 – –
At year-end Vid årets utgång 18 16 1 2

Provisions for the respective reversal of reserves for bad debts are included in the item “Selling expenses” in the income statement. In other categories within accounts receivable and other receivables, no assets are included for which impairment is needed. The maximum exposure to credit risks as per the balance sheet date is the fair value for each category of receivables mentioned above. The Group holds no assets pledged as security.

Reported amounts, per currency, for the Group’s accounts receivable:

Group Parent Company
SEK m 2019 2018 2019 2018
  Koncernen Moderbolaget
MSEK  2019 2018  2019 2018
SEK SEK 35 38 35 38
EUR EUR 526 550 21 21
GBP GBP 20 94 – –
DKK DKK 36 37 36 37
NOK NOK 21 25 21 25
PLN PLN 87 18 – –
CHF CHF 21 22 – –
AUD AUD 101 70 – –
Other currencies* Andra valutor* 68 67 – –
Total Summa 915 921 113 121
1) Other currencies include NZD, RUB, SGD, THB, USD, etc.