Page 59 - JTC-Annual Report-2025-Eng

JTC Logistics Transportation & Stevedoring Company K.S.C.P
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2025
(All amounts are in Kuwaiti Dinars)

expected cash flows will include cash flows from the sale of collateral held or other credit
enhancements that are integral to the contractual terms.

For trade and other receivables, the Group applies the standard’s simplified approach
and calculates ECLs based on lifetime expected credit losses. Accordingly, the Group does
not track changes in credit risk, but instead recognizes a loss allowance based on lifetime
ECLs at each reporting date. The Group establishes a provision matrix that is based on
the Group’s historical credit loss experience, adjusted for forward-looking factors specific
to the customers and the economic environment. Exposures are segmented based on
common credit characteristics such as credit risk grade, geographic region and industry,
delinquency status and age of relationship, where applicable.
ECLs are recognised in two stages. For credit exposures for which there has not been
a significant increase in credit risk since initial recognition, ECLs are provided for credit
losses that result from default events that are possible within the next 12-months (a
12-month ECL). For those credit exposures for which there has been a significant increase
in credit risk since initial recognition, a loss allowance is required for credit losses expected
over the remaining life of the exposure, irrespective of the timing of the default (a lifetime
ECL).

The management considers a financial asset in default when the contractual payments
are 365 days past due. However, in certain cases, the management may also consider a
financial asset to be in default when internal or external information indicates that the
Group is unlikely to receive the outstanding contractual amounts in full.

B) Financial liabilities
Initial recognition
All financial liabilities are recognized initially at fair value and, in the case of loans and
borrowings and payables, net of directly attributable transaction costs. All financial
liabilities are subsequently measured at FVTPL or at amortized cost using effective
interest rate method.

Categories and measurement of financial liabilities

Financial liabilities at amortized cost
Financial liabilities that are not at FVTPL are measured subsequently at amortized cost
using the effective interest method.

The Group’s financial liabilities measured at amortized cost are as follows:
i. Accounts payable
Accounts payable include trade and other payables. Trade payables are obligations to
pay for goods or services that have been acquired in the ordinary course of business
from suppliers. Trade payables are recognized initially at fair value and subsequently
measured at amortized cost using the effective interest method. Accounts payable
are classified as current liabilities if payment is due within one year or less (or in the
normal operating cycle of the business if longer). If not, they are presented as non -
current liabilities.

57 JTC LogisTiCs TransporTaTion & sTevedoring Company K.s.C.p.