Amounts due from Group undertakings are a combination of interest bearing and interest free receivables and are all repayable on demand.

The Group manages credit risk through the use of a receivables purchase arrangement, for an element of its trade receivables. Under the terms of this arrangement, the Group transfers the credit risk, late payment risk and control of the receivables sold. This arrangement contributed €45.0m to Group cash (FY2020: €131.4m) at 28 February 2021. The Group’s debtors would therefore have been €45.0m higher (FY2020: €131.4m) had the programme not been in place. The Group’s trade receivables programme is not recognised on the Consolidated Balance Sheet as it meets the de-recognition criteria under IFRS 9 Financial Instruments.

The aged analysis of trade receivables and advances to customers analysed between amounts that were not past due and amounts past due at 28 February 2021 and 29 February 2020 were as follows:

Trade receivables, advances to customers and other receivables are recognised initially at fair value and subsequently measured at amortised cost less loss allowance or impairment losses.

Specifically, for advances to customers, any difference between the present value and the nominal amount at inception is treated as an advance of discount prepaid to the customer and is recognised in the Income Statement in accordance with the terms of the agreement. The discount rate calculated by the Group is at least based on the risk-free rate plus a margin, which takes into account the risk profile of the customer.

The Group applies the simplified approach permitted by IFRS 9 Financial Instruments to measure expected credit losses for trade receivables, which requires expected lifetime losses to be recognised from initial recognition of the receivables.

To measure the expected credit losses, trade receivables are assessed collectively in groups that share similar credit risk characteristics, such as customer segments and in particular the Group’s view of how COVID-19 and related restrictions impacted particular customer segments over the last twelve month period and how they are expected to impact them going forward, historical information on payment patterns including the payment patterns over the last twelve month period, terms of payment, the expected impact of government schemes coming to an end as markets reopen and what impact that might have on the Group’s customers including an assessment of the risk of insolvencies due to lack of liquidity when the extended government payment terms cease. COVID-19 had and continues to have a material impact on the assessment of credit losses of the Group’s receivables balances. The Group booked an exceptional provision of €19.4m in FY2020 with respect to the Group’s receivables balances and has recorded an exceptional credit of €6.1m in this regard in the current financial year (note 5).

Regarding advances to customers, the Group applies the general approach to measure expected credit losses which requires a loss provision to be recognised based on twelve month or lifetime expected credit losses, provided a significant increase in credit risk has occurred since initial recognition. The Group assesses the expected credit losses for advances to customers based on historical information on repayment patterns including the repayment patterns over the last twelve month period, the expected impact of government schemes coming to an end as markets reopen and what impact that might have on the Group’s advances to customers including an assessment of the risk of insolvencies due to lack of liquidity when the extended government payment terms cease. The credit risk on advances to customers can be reduced through the value of security and/or collateral given. In the current and prior financial year, COVID-19 had a material impact on the assessment of credit losses with regard to advances to customers at year end and the Group booked an exceptional provision of €1.2m (FY2020: €5.8m) in this regard (note 5).

Trade receivables are on average receivable within 33 days (FY2020: 21 days) of the balance sheet date, are unsecured and are not interest bearing. For more information on the Group’s credit risk exposure refer to note 24.

The movement in the allowance for impairment in respect of trade receivables and advances to customers during the year was as follows:

At 28 February 2021, regarding the impact of the expected loss model on trade receivables and advances to customers, the Group has provided for expected credit losses over the next twelve months of €6.2m (FY2020: €22.3m) and expected lifetime losses of €21.5m (FY2020: €17.7m).