2019 Annual Report (^127)
Contract assets relate to the Group’s rights to consideration for performance obligations that have been satisfied,
primarily from Carrier Business and Enterprise Business contracts. Contract assets are transferred to receivables
when the right to payment becomes unconditional, but for the passage of time. This usually occurs when the
Group issues an invoice to the customer in accordance with the billing milestones agreed in the contract, which
are generally upon passing of the product acceptance tests.
Significant changes in the gross balances of contract assets during the year are as follows:
(CNY million) 2019 2018
At January 1 48,693 19,728
Acquisition of subsidiaries – 118
Addition during the year 50,193 46,262
Transfers to receivables or reversal during the year (45,163) (17, 39 4)
Reclassified as assets held for sale (702) –
Exchange adjustments 368 (21)
At December 31 53,389 48,693
22 Trade and bills receivable
(CNY million) Note 2019 2018
Trade receivables
Trade receivables from third parties (i) 85,217 90,988
Trade receivables from related parties 32 77 64
85,294 91,052
Bills receivable
Bank acceptance bills 1,821 733
Commercial acceptance bills 2,245 2,776
Letters of credit 705 1,022
(ii) 4,771 4,531
90,065 95,583
Non-current portion 4,540 3,588
Current portion 85,525 91,995
90,065 95,583
(i) As at December 31, 2019, the Group’s trade receivables that may be sold through reverse factoring arrangement amounted to CNY7,805
million (2018: CNY6,228 million). These trade receivables are managed in a business model whose objective is achieved by both collection
and sale, and are therefore measured at FVOCI.
(ii) The Group’s bills receivable are due within twelve months from issuance date.
coco
(coco)
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