As of December 31, 2012, provisions for impairment of trade receivables amounted to SEK 674m (904). The Group’s policy is to reserve 50% of trade receivables that are 6 months past due but less than 12 months, and to reserve 100% of receivables that are 12 months past due and more. During 2012 a clarification of the policy was made where receivables more than 12 months past due and fully reserved are considered as an actual credit loss as long as the unrecoverable status has been confirmed. If the provision is considered insufficient due to individual consideration such as bankruptcy, officially known insolvency, etc., the provision should be extended to cover the extra anticipated losses.
The fair value of trade receivables equals their carrying amount as the impact of discounting is not significant. Electrolux has a significant concentration on a number of major customers, primarily in the US, Latin America and Europe. Receivables concentrated to customers with credit limits amounting to SEK 300m or more represent 29.0% (31.5) of the total trade receivables. The creation and usage of provisions for impaired receivables have been included in Selling expenses in the income statement.
