Notes to the Financial Statements Efficiency of Operation 16 Cash and cash equivalents as at 30 June 2022 includes $8,938.9m in debt and equity proceeds received for the acquisition of Vifor (Note 2). 17 T he carrying amount disclosed above is a reasonable approximation of fair value. The maximum exposure to credit risk at the reporting date is the carrying amount of each class of receivable disclosed above. Refer to Note 11 for more information on the risk management policy of the Group and the credit quality of trade receivables. Note 14: Cash and Cash Equivalents 2022 US$m 2021 US$m Cash at bank and on hand 1,531.0 1,426.0 Cash deposits 8,905.4 382.8 Total cash and cash equivalents16 10,436.4 1,808.8 Cash and cash equivalents are held for the purpose of meeting short term cash commitments rather than for investment or other purposes. They are made up of: • Cash on hand. • At call deposits with banks or financial institutions. • Investments in money market instruments that are readily convertible to known amounts of cash and subject to insignificant risk of changes in value. For the purposes of the cash flow statement, cash at the end of the financial year is net of bank overdraft amounts. Cash flows are presented on a gross basis. The GST component of cash flows arising from investing and financing activities that are recoverable from or payable to a taxation authority are presented as part of operating cash flows. Note 15: Receivables, Contract Assets and Payables (a) Receivables and contract assets 2022 US$m 2021 US$m Current Trade receivables 965.8 997.0 Contract assets 202.0 234.5 Less: Provision for expected credit losses (16.9) (23.5) 1,150.9 1,208.0 Other receivables 332.3 355.7 Prepayments 174.0 147.5 Carrying amount of current receivables and contract assets 1,657.2 1,711.2 Non-Current Long term deposits/other receivables 12.8 6.6 Carrying amount of non-current receivables and contract assets17 12.8 6.6 Receivables are initially recorded at their transaction price and are generally due for settlement within 30 to 60 days from date of invoice. Collectability is regularly reviewed at an operating unit level. A provision for expected credit losses (ECL) is recognised based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. Cash flows relating to short-term receivables are not discounted if the effect of discounting is immaterial. When a trade receivable for which a provision for expected credit loss has been recognised becomes uncollectible in a subsequent period, it is written off against the provision. 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). For trade receivables and contract assets, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment. CSL Limited Annual Report 2021/22 128
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