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Trade and other receivables
 12 Months Ended
Dec. 31, 2020
Text block [abstract]  
Trade and other receivables
18. Trade and other receivables
   
2020
$m
   2019
$m		 
Trade receivables
a
  
 
309
 
   515 
  
 
 
   
 
 
 
Other receivables
  
 
129
 
   37 
  
 
 
   
 
 
 
Prepayments
  
 
76
 
   114 
  
 
 
   
 
 
 
  
 
514
 
   666 
  
 
 
   
 
 
 
 
a
 
Including cost reimbursements of $26m (2019: $67m).
Trade and other receivables are held at amortised cost. Trade receivables are
non-interest-bearing
and are generally on payment terms of up to 30 days. The fair value of trade and other receivables approximates their carrying value.
Other receivables includes $77m relating to the UK portfolio rent. The Group has deferred rent payments due since 1 April 2020 (other than payments of ground rent) with consideration given to the UK Government and other commercial tenant protection measures which are in place up to 31 March 2021. A final rent reconciliation is expected in
mid-2021,
at which point no further rent will be payable and any rent paid in relation to 2020 will be recoverable from the landlord. $65m has been recognised within trade and other payables in relation to the rents due under the leases at 31 December, with the receivable balance reflecting the recovery of both amounts due and amounts paid in 2020.
Expected credit losses
The impairment charge in respect of trade receivables was $40m (2019: $8m). This amount and $48m relating to trade deposits and loans (see note 17) comprise the total impairment loss on financial assets in the Group income statement. A further impairment charge of $24m was recognised within System Fund expenses (2019: $12m).
In the Group’s interim financial statements as at 30 June 2020, exceptional items included an impairment of trade receivables of $22m which had been determined to be directly as a result of
Covid-19.
The subsequent improvement in cash collection and the considerations required to identify whether subsequent expected credit losses over the extended period of the pandemic are due to
Covid-19
have resulted in none of the full year $40m impairment of trade receivables being presented within exceptional items.
Expected credit losses were calculated as follows:
 
• 
By applying the Group’s historical policy for estimating the expected credit loss provision, supported by the Group’s prior experience; and
 
• 
By identifying hotel owners subject to payment plans or identified as distressed and applying a percentage provision to all outstanding receivables.
The net balances presented in the table below could result in additional credit losses if they are ultimately found to be uncollectible.
The ageing of trade receivables at the end of the reporting period is shown below; the ageing reflects the initial terms under the invoice rather than the revised terms where payment flexibility has been provided to owners. Expected credit losses relating to other receivables are immaterial.
 
   
2020
   2019 
   
Gross
$m
   
Credit loss
allowance
$m
  
Net
$m
   Gross
$m		   Credit loss
allowance
$m		  Net
$m		 
Not past due
  
 
153
 
  
 
(1
) 
 
 
152
 
   363    (3)   360 
  
 
 
   
 
 
  
 
 
   
 
 
   
 
 
  
 
 
 
Past due 1 to 30 days
  
 
59
 
  
 
(2
) 
 
 
57
 
   74    (3)   71 
  
 
 
   
 
 
  
 
 
   
 
 
   
 
 
  
 
 
 
Past due 31 to 90 days
  
 
61
 
  
 
(6
) 
 
 
55
 
   56    (5)   51 
  
 
 
   
 
 
  
 
 
   
 
 
   
 
 
  
 
 
 
Past due more than 90 days
  
 
40
 
  
 
(7
) 
 
 
33
 
   35    (7)   28 
  
 
 
   
 
 
  
 
 
   
 
 
   
 
 
  
 
 
 
Past due more than 180 days
  
 
74
 
  
 
(62
) 
 
 
12
 
   5    —     5 
  
 
 
   
 
 
  
 
 
   
 
 
   
 
 
  
 
 
 
  
 
387
 
  
 
(78
) 
 
 
309
 
   533    (18)   515 
  
 
 
   
 
 
  
 
 
   
 
 
   
 
 
  
 
 
 
The credit risk relating to balances not past due is not deemed to be significant.
The movement in the allowance for expected lifetime credit losses of trade receivables during the year is as follows:
 
   
2020
$m
   2019
$m		   2018
$m		 
At 1 January
  
 
(18
) 
   (11)    (77) 
  
 
 
   
 
 
   
 
 
 
Adjustment arising on adoption of IFRS 9
a
  
 
—  
 
   —      67 
  
 
 
   
 
 
   
 
 
 
Impairment loss
  
 
(40
) 
   (8)    (17) 
  
 
 
   
 
 
   
 
 
 
System Fund impairment loss
  
 
(24
) 
   (12)    (11) 
  
 
 
   
 
 
   
 
 
 
Amounts written off
  
 
7
 
   14    26 
  
 
 
   
 
 
   
 
 
 
Exchange and other adjustments
  
 
(3
) 
   (1)    1 
  
 
 
   
 
 
   
 
 
 
At 31 December
  
 
(78
) 
   (18)    (11) 
  
 
 
   
 
 
   
 
 
 
 
a
IFRS 9 was applied from 1 January 2018. Under the transition method chosen, comparative information was not restated.
 
Credit risk
The Group trades only with recognised, creditworthy third parties. It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures.
The maximum exposure to credit risk for trade and other receivables, excluding prepayments, at the end of the reporting period by geographic region is as follows:
 
   
2020
$m
   2019
$m		 
Americas
  
 
212
 
  
 
359
 
  
 
 
   
 
 
 
EMEAA
  
 
183
 
   141 
  
 
 
   
 
 
 
Greater China
  
 
43
 
   52 
  
 
 
   
 
 
 
  
 
438
 
   552