4.3.19Trade and Other Receivables

Trade and other receivables (summary)

The increase in other accrued income is a result of the recognition of accrued income related to the FPSO Capixaba and the Deep Panuke MOPU.

At the request of the client, FPSO Capixaba was shut down in April 2020 enabling the Company to complete an extensive maintenance program. In agreement with the client, this shutdown was extended to a total duration of approximately four months. During this period, no charter payment was due. The period of approximately four months has been added to the charter contract at the end of the current lease period, leading to the recognition of an associated accrued income of approximately US$20 million to ensure the recognition of the unchanged remaining lease income on a straight-line basis over the new duration of the lease with reference to IFRS 16 ‘Leases’.

The Deep Panuke MOPU was safely redelivered by the client to the Company in July 2020. As a result of the redelivery of the unit and the final settlement, the lease period of the unit, as per accounting requirements, has ended and the Company (i) recognized the remaining contractual revenue (US$122 million), which also includes the portion of the financial consideration to be received in 2021 in case no early lump sum payment is made (i.e. US$77 million). Therefore, the amount of US$77 million is included in other accrued income as per December 31, 2020.

The decrease in prepayments of US$51 million is mainly related the progress made in 2020 on the construction of a new multi-purpose floater hull which has not yet been allocated to a project.

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 4.3.29 Financial Instruments − Fair Values and Risk Management.