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Trade receivables at 31st December 2007 and 2006 consist of the following:
(in €m) |
31st December 2007 |
31st December 2006 |
|
|
|
Receivables from sales of goods and services |
5,026 |
5,227 |
Allowance for doubtful accounts |
(387) |
(375) |
Total |
4,639 |
4,852 |
Trade receivables are classified as current assets. As of 31st December 2007 and 2006, respectively, €175 million and €132 million of trade receivables are not expected to be collected within one year.
In application of the percentage of completion (POC) method, as of 31st December 2007 an amount of €1,488 million (in 2006: €1,477 million) for construction contracts is included in the trade receivables net of related advance payments received.
(in €m) |
2007 |
|
|
Construction contracts: assets |
5,134 |
Construction contracts: liabilities |
(5,409) |
Construction contracts, net liabilities |
(275) |
This amount corresponds to: |
|
Aggregated amount of costs incurred and recognised profits (less recognised losses) to date; |
21,128 |
Less, progress billings |
(21,403) |
The respective movement in the allowance for doubtful accounts in respect of trade receivables during the year was as follows:
(in €m) |
2007 |
2006 |
|
|
|
Allowance balance at 1st January |
(375) |
(407) |
Utilisations/Disposals |
18 |
53 |
Write-downs/reversal of write downs |
(33) |
(18) |
Foreign exchange rate differences |
3 |
(3) |
31st December |
(387) |
(375) |
Based on historic default rates, the Group believes that no allowance for doubtful accounts is necessary in respect of trade receivables not past due in the amount of €3,403 million.
