26. | TRADE RECEIVABLES, OTHER RECEIVABLES AND PREPAYMENTS |
As at December 31, | |||||||||
2017 | 2016 | ||||||||
Trade receivables | 11,860,798 | 24,763,795 | |||||||
Bad debt provision for trade receivables | (1,359,255 | ) | (1,280,330 | ) | |||||
10,501,543 | 23,483,465 |
As at December 31, | |||||||||
2017 | 2016 | ||||||||
Other receivables | 2,849 | 2,251 | |||||||
Prepayments | 1,898,419 | 5,361,869 | |||||||
1,901,268 | 5,364,120 |
The fair value of trade and other receivables have not been disclosed as, due to their short duration, management considers the carrying amounts recognized in the consolidated statements of financial position to be reasonable approximation of their fair values.
Prepayments include advances to suppliers and prepaid income tax.
Before accepting any new customer, the Group assesses the potential customer’s credit quality and defined credit limits by customer. Limits attributed to customers are reviewed once a year. The aging analysis of trade receivables is as follows:
As at December 31, | |||||||||
2017 | 2016 | ||||||||
Current | 1,791,936 | 1,496,397 | |||||||
Past due for less than 4 months | 2,721,633 | 9,306,568 | |||||||
Past due for more than 4 months | 7,347,229 | 13,960,830 | |||||||
11,860,798 | 24,763,795 |
The Group allows an average credit period of 90 -120 days to its trade customers. For the overdue trade receivable, the Company provided a bad debt allowance amounting to $nil and $331,196 during the years ended December 31, 2017 and 2016, respectively. The provision for doubtful debts is recorded using a provision account unless the Group is satisfied that recovery is remote, in which case the unrecovered loss is written off against trade receivables and the provision for doubtful debts directly. The Group does not hold any collateral over these balances.
The movement in the provision for doubtful debts during the year is as follows:
2017 | 2016 | ||||||||
As at Janaury 1 | 1,280,330 | 1,028,439 | |||||||
Provision provided in the year | - | 331,196 | |||||||
Translation adjustment | 78,925 | (79,305 | ) | ||||||
As at December 31 | 1,359,255 | 1,280,330 |
Among the amounts of trade receivables, $1,723,364 and $3,598,158 of output VAT was included as of December 31, 2017 and 2016, respectively.