Mandarin Oriental International Limited - Mandarin Oriental Hotel ...

Notes to the Financial Statements Continued
14 Debtors and prepayments continued
The average credit period on provision of services varies among Group businesses and is not more than 30 days.
Before accepting any new customer, individual Group business assesses the potential customer’s credit quality and sets
credit limits by customer, using internal credit scoring systems. These limits and scoring are reviewed periodically.
An allowance for impairment of trade debtors is made based on the estimated irrecoverable amount. Significant
financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganization, and
default or delinquency in payment are considered indicators that the debtor is impaired.
At 31st December 2008, trade debtors of US$1.7 million (2007: US$1.0 million) were impaired. The amount of
the provision was US$1.2 million (2007: US$0.6 million). It was assessed that a portion of the debtors would be
recoverable. The ageing analysis of these trade debtors is as follows :
60 Mandarin Oriental International Limited
2008 2007
US$m US$m
Below 30 days 0.2 0.2
Between 31 and 60 days 0.3 0.1
Between 61 and 90 days 0.1 0.1
Over 90 days 1.1 0.6
1.7 1.0
At 31st December 2008, trade debtors and other debtors of US$13.8 million (2007: US$12.4 million) were past due
but not impaired. The ageing analysis of these trade debtors and other debtors is as follows :
Below 30 days 6.7 6.7
Between 31 and 60 days 1.4 3.0
Between 61 and 90 days 2.1 1.3
Over 90 days 3.6 1.4
13.8 12.4
The risk of trade debtors and other debtors that are neither past due nor impaired at 31st December 2008 becoming
impaired is low as the majority of the balances have been settled subsequent to year end.
Movements on the provision for impairment are as follows:
Trade debtors
2008 2007
US$m US$m
At 1st January (0.6 ) (1.2 )
Additional provisions (0.6 ) –
Unused amounts reversed – 0.5
Bad debts written off – 0.1
At 31st December (1.2 ) (0.6 )