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Integrated report 2020

25.1.1 Financial receivables and other financial receivables

Contents

ACCOUNTING PRINCIPLES

Financial receivables

Financial receivables, including trade receivables, are measured as at the date they arise at fair value, and then at amortised cost using the effective interest rate, including write-downs for expected credit loss.

The Group applies simplified methods of valuation of receivables measured at amortised cost if it does not distort the information contained in the statement of financial position, in particular when the period until the payment of receivables is not long.

For financial receivables, the Group assesses the amount of a write-down related to expected credit losses in the amount equal to expected credit losses during the whole lifetime of an instrument.

The Group measures financial assets at amortised cost, in accordance with the adopted business model.

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As at December 31, 2020 As at December 31, 2019
Long-term Short-term Long-term Short-term
Trade receivables – 3,602 – 3,483
Deposits and loans 185 6 174 8
Bonds – 40 – –
Receivables for recognised compensation under the Electricity Pricing Act – 85 – 304
Deposits, securities and sureties 2 788 1 771
Damages and penalties – 102 – 112
Other financial receivables 4 189 5 137
FINANCIAL RECEIVABLES 191 4,812 180 4,815

Deposits, securities and sureties mainly relate to transaction and hedging deposits as well as the guarantee fund related to trade in electricity and emission allowances.

The main component of trade receivables is receivables reported by PGE Obrót S.A.  Receivables from households represent approximately 17% of the consolidated balance of trade receivables, while receivables from corporate customers of PGE Obrót S.A. represent approximately 62% of the consolidated balance of trade receivables. As at December 31, 2020, the share of the three largest customers of the PGE Capital Group amounted to approximately 9% of the balance of this item. Additional information on trade receivables is presented in note 26.3.1. to these financial statements.

Trade receivables also include adjustments to estimates of electricity sales.

Other financial receivables mainly comprise the guarantee fund, damages and disputed receivables described note 28.4to these consolidated financial statements.

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25.1.2 Derivatives and other receivables measured at fair value through profit or loss

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