Woodside Petroleum Ltd|Financial Statements 121
for the year ended 31 December 2018
In this section
This section addresses the other assets and liabilities position at the end of the reporting period including, where applicable, the accounting
policies applied and the key estimates and judgements made.
D. Other assets and liabilities
D.1 Receivables Page 122
D.2 Inventories Page 122
D.3 Payables Page 122
D.4 Provisions Page 123
D.5 Other financial assets and liabilities Page 124
D.6 Segment assets and liabilities Page 124
D.7 Non-current assets held for sale Page 125
Key financial and capital risks in this section
Credit risk management
Credit risk is the risk that a counterparty will not meet its obligation under a financial instrument or customer contract, leading to a financial
loss to the Group. Credit risk arises from the financial assets of the Group, which comprise trade and other receivables and deposits with
banks and financial institutions.
The Group manages its credit risk on trade receivables and financial instruments by predominantly dealing with counterparties with an
investment grade credit rating. Customers who wish to trade on unsecured credit terms are subject to credit verification procedures.
Receivable balances are monitored on an ongoing basis. As a result, the Group’s exposure to bad debts is not significant. The Group’s
maximum credit risk is limited to the carrying amount of its financial assets.
Customer credit risk is managed by each business unit subject to the Group’s established policy, procedures and controls relating to
customer credit risk management. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual
credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored. At 31 December
2018, the Group had 7 customers (2017: 6 customers) that owed the Group more than $10 million each and accounted for approximately
90% (2017: 85%) of all the receivables. Payment terms are typically 14 to 30 days providing only a short credit exposure.
At 31 December 2018, the Group had a provision for credit losses of nil (2017: nil). Subsequent to 31 December 2018, 100% (2017: 100%) of
the trade receivables balance of $266 million (2017: $214 million) has been received.
Credit risk from balances with banks is managed by the Group’s treasury department in accordance with the Group’s policy. The Group's
main funds are placed as short term deposits with reputable financial institutions with strong investment grade credit ratings.
The Group’s maximum exposure to credit risk for the components of the statement of financial position at 31 December 2018 and 2017 is
the carrying amounts as illustrated in this Note D.