A receivable is recognized once the Group has an uncondi­tional right to payment. Initially, accounts receivable are rec­ognized at the transaction value according to contractual terms and conditions. They do not carry any interest. Subseq­uently, accounts receivable are measured at amortized cost,which equals their transaction value less bad debt allowances.

Bad debt allowances are initially recognized through individual value adjustments, where deemed necessary. For accounts receivable that are not individually adjusted, the Group applies the simplified approach for the recognition of expected lifetime losses using a provision matrix based on the aging of accounts receivable. The provision matrix is based on the Group’s historical credit loss experience, adjusted for forward-looking factors specific to the debtors, the economic environ­ment in which they operate, as well as market trends and devel­opments.

Changes in bad debt allowances and write-offs of accounts receivable are recognized as other operating expenses. Accounts receivable are written off when there is no reasonable expectation of recovery.