Swisscom Ltd – Annual report – 31 December 2023
Industry: telecoms
3 Operating assets and liabilities (extract)
3.1 Net current operating assets (extract)
Movements in operating assets and liabilities (extract)
Trade receivables
Other operating assets and liabilities
Contract assets and liabilities
Contract assets of Swisscom Switzerland primarily include deferrals arising in connection with the sale of bundled offerings in the mobile-phone area. In part, mobile handsets are sold on a subsidised basis, together with a mobile contract in a bundled offering. As a result of the allocation of revenue over the pre-delivered components (mobile handset), revenues are recognised earlier than the invoicing thereof. This results in contract assets deriving from this business being recognised. The contractual liabilities mainly cover deferrals from payments for prepaid cards and prepaid Swisscom Switzerland subscription fees. In 2023, an amount of CHF 359 million was recorded as revenue which had been recognised as a contract liability as at 31 December 2022. With the disclosure of the performance obligations that are unsatisfied and the allocated transaction price, Swisscom avails itself of the rules of IFRS 15.121. The exemption is not applied in the case of mobile-phone contracts with the sale of a subsidised mobile handset and a minimum contract term. These contracts incorporate revenue of CHF 653 million (2024: CHF 502 million; 2025: CHF 151 million).
Accounting policies
Operating assets and liabilities
Total operating assets and liabilities used in the normal course of business are disclosed as current items in the balance sheet.
Trade receivables
Trade and other receivables are measured at amortised cost less impairment losses. Impairment losses on trade receivables are recognised, depending on the nature of the underlying transaction, in the form of individual valuation allowances or portfolio-based general valuation allowances which cover the anticipated default risk. As regards portfolio-based general valuation allowances, financial assets are grouped together based on homogeneous credit risk attributes, reviewed collectively for impairment and, whenever required, impairment losses are recognised. In addition to the contractually foreseen payment conditions, historical default rates and current information and expectations are taken into consideration in determining the expected future cash flows from the portfolio. Impairment losses for trade receivables are recognised as other operating expenses.
2.5 Financial risk management (extract)
Swisscom is exposed to various financial risks arising from its operating and financing activities. Financial risk management is conducted in accordance with established guidelines, with the objective of limiting the potentially adverse effects thereof on the financial situation of Swisscom. The identified risks and measures to minimise them are presented below.
Credit risks (extract)
Financial risks from operating activities
Credit risks on trade receivables, contract assets and other receivables arise from the Group’s operating activities. Credit risks from other receivables are insignificant. As an initial step, Swisscom divides the credit risks from operating activities between Swisscom Switzerland and Fastweb. Default risks are principally impacted by the individual attributes of the customers. They are also influenced by the default risk of customer groups and industry sectors. Swisscom has a receivables management system in place to minimise default losses. It reviews new customers for their creditworthiness and sets maximum payment terms for customer groups. As regards their creditworthiness, Swisscom divides customers into groups for the purposes of monitoring default risk. In the process it differentiates between individual and business customers, among other things. In addition, it takes into account the ageing structure of the receivables as well as the industry segment in which a business customer is active. The split of trade receivables and contract assets by operating segment is as follows:
As at 31 December 2023, the maturities of trade receivables and contract assets as well as any related valuation allowances may be analysed as follows:
As at 31 December 2022, the maturities of trade receivables and contract assets as well as any related valuation allowances may be analysed as follows:
Movements in valuation allowances for trade receivables and contract assets may be analysed as follows:
Accounts examples 