124 CSE Global Limited 2. Summary of significant accounting policies (cont’d) 2.4 Significant accounting judgments and estimates (cont’d) (b) Key sources of estimation uncertainty The key assumptions concerning the future and other key sources of estimation uncertainty at the end of each reporting period are discussed below. The Group based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising beyond the control of the Group. Such changes are reflected in the assumptions when they occur. Impairment assessment of trade receivables and contract assets The Group uses a provision matrix to calculate expected credit losses (“ECLs”) for trade receivables and contract assets. The provision matrix is based on historical observed default rates, existing market conditions, adjusted for forward looking information at each reporting period. The determination of ECL require the use of management judgment and estimates and are sensitive to changes in circumstances and economic conditions. This information about the ECLs on the Group’s trade and other receivables and contract assets is disclosed in Note 11 and Note 9 respectively. The carrying amount of trade receivables and contract assets as at 31 December 2024 are $117,242,000 and $121,160,000 (2023: $110,309,000 and $124,765,000) respectively. Impairment assessment of goodwill As disclosed in Note 7 to the financial statements, the recoverable amounts of the cash generating units which goodwill have been allocated to are determined based on value in use calculations. The value in use calculations are based on a discounted cash flow models. The recoverable amount is most sensitive to the discount rate used for the discounted cash flow model the expected future cash inflows and the long term growth rate. The key assumptions applied in the determination of the value in use including a sensitivity analysis, are disclosed and further explained in Note 7 to the financial statements. The carrying amount of the goodwill as at 31 December 2024 is $90,430,000 (2023: $77,105,000). 2.5 Foreign currency The financial statements are presented in Singapore Dollars, which is also the Company’s functional currency. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency. (a) Transactions and balances Transactions in foreign currencies are measured in the respective functional currencies of the Company and its subsidiaries and are recorded on initial recognition in the functional currencies at exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the end of the reporting period. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rate at the date when the fair value was measured. Exchange differences arising on the settlement of monetary items or on translating monetary items at the end of the reporting period are recognised in profit or loss. NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 December 2024
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