Entire Document - Chris Hani District Municipality

5.2 Reconciliation of Provision for ImpairmentBalance at beginning of year 66 571 435 30 200 253Impairment Losses recognised 471 591 61 988 538Impairment Losses reversed (58 868 340) -Amounts written off as uncollectable (6 275 183) (25 617 356)Amounts recovered - -Balance at end of year 1 899 504 66 571 435The Provision for Impairment on Other Trade Receivables exists predominantlydue to the possibility that these debts will not be recovered. Loans and receivableswere assessed individually and grouped together at the Statement of FinancialPosition as financial assets with similar credit risk characteristics and collectivelyassessed for impairment.Chapter 4The Provision for Impairment was calculated after grouping all the financial assets ofsimilar nature and risk ratings and assessing the recoverability.In determining the recoverability of a Debtor, the municipality considers any changein the credit quality of the Debtor from the date credit was initially granted up to thereporting date. The concentration of credit risk is limited due to the customer basebeing large and unrelated. Accordingly, the management believe that there is nofurther credit provision required in excess of the Provision for Impairment.The following loans and receivables are included in the total amount of theProvision for Impairment :Government Subsidy Claims - 2 607 390Projects - 60 734Recoverable Works - 146 486Short-term Loans - 2 311 539Sundry Debtors 1 899 504 61 445 286Total Provision for Impairment on Other Debtors 1 899 504 66 571 435VAT RECEIVABLEVat Receivable 16 436 009 16 807 038VAT Receivable has been restated to correctly disclose the debtor held by themunicipality in terms of expenditure incurred on behalf of Health Services. Refer toNote 38.3 on “Correction of Error” for details of the restatement.Vat is payable on the receipts basis. Only once payment is received from debtors,119