IFRS 7 paras 42A-42H, disclosure for transfers of financial assets that have not been derecognised

SoftBank Group Corp. – Annual report – 31 March 2020

Industry: telecoms, software

31. Transfers of financial assets (extract)

The Group enters into securitization transactions involving trade and installment receivables.

The major securitization transactions involve the securitization of installment receivables recognized from the mobile device sales business.

For each transaction, the Group transfers receivables to financial institutions and acquires cash and subordinate interest in the transferred receivables for financing purposes. The receivables transferred are not derecognized because in each transaction the Group retains subordinate interest and, therefore, substantially retains all the risks and rewards of ownership of the transferred assets. Cash received from transferring the receivables are included in “Interest-bearing debt” under current liabilities and noncurrent liabilities.

The following table presents the carrying amount of financial assets and related liabilities that are transferred but do not meet the derecognition criteria, as well as the fair value where related liabilities have recourse only to the transferred assets:

(Fair value of financial assets and financial liabilities where related liabilities have recourse only to the transferred assets)

The difference between transferred assets and related liabilities is the subordinate interest which the Group retains on securitization.