Credit Risk
Credit risk is the risk of financial
loss to the Group if a customer or counterparty to a financial
instrument fails to meet its contractual obligations, and arises
principally from Symrise’s receivables from customers and investment
securities.
Symrise’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The Executive Board will establish a credit policy in 2008 under which each new customer is analyzed individually for creditworthiness before the Group’s standard payment and delivery terms and conditions are offered.
The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables. The main components of this allowance are a specific loss component that relates to individually significant exposures and a collective loss component established for groups of similar assets in respect of losses that have been incurred, but not yet identified.