16 5.5 Loans to customers Loans to customers are stated at the principal balances, excluding accrued interest receivables. Unrecognised deferred income and discounts on loans are deducted from the loan balances. Hire purchase and finance lease receivables are stated at outstanding balance, net of deferred revenue. Deferred revenue is stated net of commissions and direct expenses incurred at the initiation of hire purchase contracts and advances received from hire purchase and finance lease receivables. The Company’s and its subsidiaries’ operations involve the acquisition and receipt of nonperforming loans (NPLs) from other financial institutions, the amounts paid to acquire loans purchased of receivables are recognised as financial assets that are credit-impaired upon initial acquisition, and presented at amortised cost. Costs of financial assets that are creditimpaired upon initial acquisition mean cash paid for acquisition (the fair value on the transaction date is equal to or close to the acquisition price). Securities and derivatives business receivables comprise the net balances of securities business receivables and derivatives business receivables. Securities business receivables comprise credit balance receivables (for which the securities purchased are used as collateral), securities borrowing and lending receivables and guarantee deposit receivables (which comprise cash placed as guarantee for borrowers of securities or Thailand Securities Depository) as well as other receivables, such as overdue amounts in cash accounts and receivables which are under legal proceedings, are undergoing restructuring, or are being settled in installments. The receivable balances of cash accounts are presented as “Receivables from purchase and sale of securities”. 5.6 Allowance for expected credit loss on financial assets Loans purchased of receivables The Company and its subsidiaries record allowance for expected credit loss when there are changes in the estimated cash inflows expected from receivables discounting the projected cash flows with reference to historical data and adjusts it on the basis of current observable data. The Company and its subsidiaries recognise changes in expected credit loss as gain or loss on impairment in profit or loss. And are required to recognise positive changes in expected credit loss as reversal of impairment, to the extent that they do not exceed the expected credit loss recognised in the past. 232
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