10.3 Trade and similar payables
in PLN millions, unless otherwise stated
Trade and similar payables are initially recognised at fair value less transaction cost and are measured at amortised cost at the end of the reporting period.
Accrued interest due to repayment of payables at a later date, in particular transferred to reverse factoring, is recognised in profit or loss, in the item “finance costs”.
Trade and similar payables presented in the statement of financial position also contain trade payables transferred to reverse factoring, which are in the category of “similar”.
Moreover, the item “similar liabilities” also includes intra-group trade payables transferred by the debtor to the factor, for which the debtor received payment from the factor. At the moment of transfer of the liabilities to reverse factoring, the Parent Entity recognises payables towards the factor, who due to the subrogation of receivables, from the legal point of view, assumes the rights and obligations common for trade payables.
Since the reverse factoring is not directly regulated by IFRS, and as a result of the ambiguous nature of transactions, it was necessary for the Parent Entity to make an important judgment on the presentation of balances of payables transferred to factoring in the statement of financial position and the presentation of transactions in the statement of cash flows.
The Parent Entity’s judgement according to which the presentation of these balances in the statement of financial position under the item „Trade and similar payables” was confirmed by the IFRS Interpretations Committee in December 2020. The Parent Entity indicates that the actual deadline for the payment of trade payables covered by reverse factoring agreements is longer (up to 180 days) than the deadline for the payment of other trade payables which are not transferred to factoring, which usually amounts to 60 days, and it may indicate a change in the nature of these payables from trade to debt. However, this feature was assessed by the Parent Entity as insufficient to consider that the nature of the payables changed completely when the trade payables were transferred to reverse factoring. Apart from the above criterion, no other terms of payables covered by reverse factoring differ from the terms of other trade payables.
| As at 31 December 2022 | As at 31 December 2021 | ||
| Non-current trade payables | 186 | 187 | |
| Current trade payables | 3 076 | 2 919 | |
| Current similar payables – reverse factoring | 18 | 95 | |
| Note 10.4 | Trade and similar payables, of which: | 3 280 | 3 201 |
| recognised in liabilities related to disposal group | – | 40 | |
| recognised as “trade and similar payables” and “other non-current liabilities” | 3 280 | 3 161 |
In 2022, the factors’ total participation limit in the Group amounted to PLN 1 553 million (including PLN 1500 million in the Parent Entity). Currently, the Parent Entity has two agreements for the provision of factoring services which was implemented in 2019 in order to make it possible for suppliers to receive repayment of receivables faster, as part of the standard procurement process executed by the Parent Entity, alongside an extension of payment dates of payables by the Parent Entity to the factor. In the current year, because of the good liquidity situation of the Parent Entity, there were no reasons to use this form of settlement, and as at 31 December 2022 no liabilities were transferred to the factors and no trade payables were covered by reverse factoring. In the current financial year, Group companies transferred to the factors payables in the total amount of PLN 72 million (in the year ended 31 December 2021, the Parent Entity transferred to the factor payables in the amount PLN 988 million, Group companies transferred payables in the amount of PLN 67 million). As at 31 December 2022, trade payables in Group companies covered by reverse factoring amounted to PLN 18 million (as at 31 December 2021, in the Parent Entity – PLN 55 million, in Group companies – PLN 40 million). In the current financial year, the Group made payments towards the factors in the amount of PLN 150 million (in the financial year ended 31 December 2021: PLN 2 213 million). Interest costs accrued and paid towards the factor in 2022 amounted to PLN 3 million (in 2021: PLN 9 million).
Repayment dates of receivables due to reverse factoring do not exceed 12 months, and consequently all payables transferred to reverse factoring are presented as short-term.
The item trade payables contains payables due to the purchase and construction of fixed and intangible assets which, as at 31 December 2022, amounted to PLN 185 million in the non-current part and PLN 627 million in the current part (as at 31 December 2021, PLN 186 million and PLN 649 million, respectively).
The Group is exposed to currency risk arising from trade payables and to liquidity risk. Information on currency risk is presented in Note 7.5.1.3 and on liquidity risk in Note 8.3.1.
The fair value of trade payables approximates their carrying amount.