Cracking the Code: EA’s Expert Guide to Recording Allowance for Doubtful Accounts

#EA #No Stocks-Company Pure Energy Public Company Limited or EA informed the Stock Exchange of Thailand By clarifying additional information about the financial statements for the 2nd quarter of 2024, the company has trade amounts due from related businesses in the amount of 6,794 million baht Most of the amounts owed come from the sale of cars to Next Point Public Company Limited NEX which has canceled the capital increase. This may affect the recording of allowance for doubtful accounts, financial position and operating results. and the company’s liquidity significantly

In this regard, the special Time Board of Directors meeting 6/2024, which held a meeting on 20 September 2024, considered the above questions regarding the Stock Exchange. and had views on various issues as follows:

1. Adequacy of the company recording an allowance for doubtful accounts of 2% of the outstanding debt from the information in the financial statements for the second quarter of 2024. The company has increased receivables from related businesses .

From 2023, the amount of 5,526 million baht is 6,794 million baht and an allowance for doubtful debts has been recorded. or allowance for impairment expected to occur in the amount of approximately 133 million baht

When considering the estimate of allowance for doubtful accounts for related business receivables, the Company uses a method to consider the default ratio (Default Rate) separated by the age distribution of debtors, 2024, under the assumption that debtor Nex Point Public Company Limited (NEX) is still able to repay. The debt will be repaid from cash flow received from NEX’s own debtors.

By considering the product delivery plan and the collection plan from NEX account receivables and from the NEX capital increase plan, which is under consideration and has not yet been approved by the NEX board of directors at the time the Company The allowance is considered on for doubtful debts for such reasons. The committee has considered and is of the opinion that estimating an allowance for doubtful debts for related business receivables is an appropriate and sufficient method in accordance with relevant financial reporting standards.

However, the company The estimate of the allowance for doubtful accounts will be revised if there is information or facts that change from the previously estimated assumptions.

2. Policy and measures for following up late trade debtors Impact on financial status AAB and EA liquidity and electric vehicle business operations

The Company has followed up on overdue trade receivables and has continuously considered and evaluated their ability to repay debts. Including sending a letter to follow up on debt payments. Bring cash flow to use in the company’s operations.

In this regard, the impact of unpaid debtors from such related companies Reported in the company’s financial statements. which has been reviewed by the company’s auditor. The Company has paid for raw materials and miscellaneous expenses using cash flow from the Company’s operations. finish

3. Will EA’s electric vehicle business model in the future change from the current one sold through NEX as shown in the figure above How is this model in the best interest of the company?

At present, the company’s electric vehicle business model It is still the same sales format through NEX, that is, the company is still aiming at Absolute Assembly Company Limited (AAB), which is a sub- indirect company to the company. which operates a business that manufactures and assembles electric vehicles for sale to NEX, where NEX is the distributor domestically and

Internationally, including providing after-sales service to large customer groups (such as Bangkok Mass Transit Authority (BMTA), Transport Company Limited (Bus), Shopping Center operators) and medium-sized customers (such as buses Sending workers to industrial estates for student transport) NEX has specialist knowledge in the commercial vehicle business in Thailand.

The Board of Directors has considered and is of the opinion that the company’s electric vehicle business model is still in the best interests of the company. and the group of companies This is because the business operations involve a combination of knowledge and strengths in which each department has expertise. which improves business together In technology, marketing, sales and comprehensive after-sales service.

Furthermore, enter into transactions between each other in It is in accordance with the trade agreement. and general trading conditions The management team has prepared a summary of the transactions that took place. and report to the Audit Committee and Board of Directors of the Company. and give a consistent opinion every quarter Currently, he is in the process of changing the payment terms between AAB and NEX.

4. Business operations policy and operating results of Paypop Co, Ltd, a 100% subsidiary, and measures for monitoring the business operations of the subsidiary.

Currently, the Company indirectly holds 99.99% of shares in Paypop Co, Ltd (POP) through EA Mobility Holding Co, Ltd. taking into account interest rates and rental fees for making contracts. According to the market rate, taking into account the debtor’s risk, the operating results of the last 2 years of POP have the following operating results:

– The year 2023 has a net profit of 96.64 million baht and

– The year 2022 has a net profit of 19.73 million baht.

In terms of debt collection measures for lease receivables, the company has a process to manage leasing loans and monitor them on an ongoing basis. By checking and considering the debtor’s ability to pay regularly. Ensure that the debt repayment status is within the criteria according to the agreement. In this regard, the debtor under the lease agreement has paid rent to POP in accordance with

Period as specified in the rental agreement.

Keep up with the game, know before anyone else, follow “Tun Stock” on all these channels.

YOUTUBE Click

Facebook Click

Click Tiktok

Telegram Click

Click Twitter

Click on Instagram