4.3.19Trade and Other Receivables

Trade and other receivables (summary)

The increase in 'Trade debtors' of US$292 million is due to the ramp-up of the Turnkey activities, especially the newly awarded preliminary scope on the FPSO for the Yellowtail development project.

The decrease in other accrued income is mainly due to the final settlement paid by the client for Deep Panuke MOPU lease for which an accrued income of US$77 million had been recognized as at December 31, 2020.

The increase in prepayments of US$74 million is mainly related to advance payments to yards related to the multi-purpose floater (MPF) hulls allocated to the newly awarded FPSO Alexandre de Gusmão.

The carrying amounts of the Company’s trade debtors are distributed in the following countries:

Trade debtors (countries where Company’s trade debtors are distributed)

The trade debtors balance is the nominal value less an allowance for estimated impairment losses as follows:

Trade debtors (trade debtors balance)

The allowance for impairment represents the Company’s estimate of losses in respect of trade debtors. The allowance related to credit risk for significant trade debtors is built on specific expected loss components that relate to individual exposures. Furthermore, the Company uses historical credit loss experience as well as forward-looking information to determine a 1% expected credit loss rate on individually insignificant trade receivable balances. The creation and release for impaired trade debtors due to credit risk are reported in the line item ’Net impairment losses on financial and contract assets’ of the consolidated income statement. Amounts charged to the allowance account are generally written off when there is no expectation of recovery.

The ageing of the nominal amounts of the trade debtors are:

Trade debtors (ageing of the nominal amounts of the trade debtors)

Not past due are those receivables for which either the contractual or ’normal’ payment date has not yet elapsed. Past due are those amounts for which either the contractual or the ’normal’ payment date has passed. Amounts that are past due but not impaired relate to a number of Company joint ventures and independent customers for whom there is no recent history of default, or the receivable amount can be offset by amounts included in current liabilities.

For the closing balance and movements during the year of allowances on trade receivables, please refer to note 4.3.28 Financial Instruments − Fair Values and Risk Management.