Lendlease Annual Report 2024

136 Lendlease Annual Report 2024 Notes to Consolidated Financial Statements continued June 2024 June 2023 $m $m Provision for Impairment Carrying amount at beginning of financial year 39 18 Impairment loss recognised during the year 67 20 Bad debts written off (2) - Other movements (including foreign exchange rate movements) (4) 1 Carrying amount at end of financial year 100 39 Total impairment as a percentage of total loans and receivables 3.7% 1.0% The credit quality of all loans and receivables, including those neither past due nor impaired, is assessed and monitored on an ongoing basis. Impairment as noted above was immaterial at 30 June 2024, though in view of prevailing market conditions there exists a heightened level of credit risk associated with counterparties. The impairment provision relates to specific loans and receivables that have been identified as being impaired, including related party loans where the Group’s interest in a development was via an equity accounted investment. A substantial portion of the Group’s loans and receivables balances are unsecured. June 2024 June 2023 21.a. Contract Assets Note $m $m Current Contract debtors 1 250 250 Construction contract assets 2 11 660 594 Accrued income 105 114 Total contract assets 1,015 958 1. Movements in contract debtors during the financial year relate primarily to amounts transferred into Trade receivables as the right to receive payment from the customer has become unconditional. 2. Movements in construction contract assets during the financial year related primarily to revenue recognised on construction contracts with customers in excess of billings raised during the financial year. 22. Trade and Other Payables Accounting Policies Trade Creditors Liabilities are recognised for amounts to be paid in the future for goods or services received, whether or not billed to the Group. Trade and other payables are settled in the normal course of business. Trade and other payables are carried at amortised cost using the effective interest method, which applies the interest rate that discounts estimated future cash outflows over the term of the trade and other payables. Cash flows relating to short term trade and other payables are not discounted if the effect of discounting is immaterial. The discount, if material, is then recognised as an expense over the remaining term. Construction Contract Liabilities Construction contracts where the total progress billings issued to clients (together with foreseeable losses, if applicable) on a project exceed the revenue recognised (costs incurred to date plus recognised profit) on the contract are recognised as a liability. Retentions Retentions are amounts payable for the purpose of security and for the provision of defects in accordance with contract terms. Release of retention amounts are in accordance with contractual terms. Unearned Income Primarily relates to unearned income and deposits received in advance on presold apartments. These amounts will be recognised as income in line with the ‘Sale of development properties’ accounting policy in Note 4 ‘Revenue from Contracts with Customers’ . Lease Liabilities Lease liabilities are measured at the present value of the lease payments discounted using the interest rate implicit in the lease. The Group uses its incremental borrowing rate as the discount rate. Section C. Liquidity and Working Capital continued 21. Loans and Receivables continued

RkJQdWJsaXNoZXIy NjM4NDM=