Page 243 - BTSGroup ONE REPORT 2021/22_EN

BTS Group Holdings Public Company Limited
Annual Report 2021/22
Financial statement of associate that the Group hold less than 20%
The management of the Group determined that the Group has significant
influence over Jay Mart Public Company Limited even though the Group
hold 14.58% of shares and voting rights. This is because the Group has
significant influence and has representation on the boards of directors of
such company. The investments in the above companies are therefore
presented as investment in associates under the equity method in the
consolidated financial statements.
Service concession arrangements
In recording transactions under service concession arrangements,
the management had to exercise significant judgement with respect
to analysis of the contents of the agreements and the recording
of the accounting transactions in accordance with the scope of
Thai Financial Reporting Standard Interpretations 12 Service Concession
Arrangements including the process of recognition and measurement
and the determination of appropriate timing of recognition of revenues
relating to service concession arrangements.
Leases
Determining the lease term with extension and termination options -
The Group as a lessee
In determining the lease term, the management is required to exercise
judgement in assessing whether the Group is reasonably certain to
exercise the option to extend or terminate the lease considering all
relevant facts and circumstances that create an economic incentive for
the Group to exercise either the extension or termination option.
6.4 Notes to Consolidated Financial Statements 241
Estimating the incremental borrowing rate - The Group as a lessee
The Group cannot readily determine the interest rate implicit in the lease,
therefore, the management is required to exercise judgement in
estimating its incremental borrowing rate to discount lease liabilities.
The incremental borrowing rate is the rate of interest that the Group would
have to pay to borrow over a similar term, and with a similar security,
the funds necessary to obtain an asset of a similar value to the right-of-use
asset in a similar economic environment.
Allowance for expected credit losses
In determining an allowance for expected credit losses, the management
needs to make judgement and estimates based upon, among other
things, past collection history, aging profile of outstanding debts,
the expected future cash-inflows and the forecast economic condition
for groupings of various customer segments with similar credit risks.
The Group’s historical credit loss experience and forecast economic
conditions may also not be representative of whether a customer will
actually default in the future.
Fair value of financial instruments
In determining the fair value of financial instruments recognised in the
statement of financial position that are not actively traded and for which
quoted market prices are not readily available, the management exercise
judgement, using a variety of valuation techniques and models.
The input to these models is taken from observable markets, and includes
consideration of credit risk, liquidity, correlation and longer-term volatility
of financial instruments. Change in assumptions about these factors
could affect the fair value recognised in the statement of financial position
and disclosures of fair value hierarchy.