BORUSSIA DORTMUNDGmbH & Co. Kommanditgesellschaft auf Aktien, Dortmund OTHER DISCLOSURES FINANCIAL RISKS (26) Credit risk The carrying amounts of the following financial instruments reflect the Group's maximum exposure to credit risk. At the end of the reporting period, the maximum exposure was as follows: Carrying amounts of financial instruments EUR '000 30/06/2021 30/06/2020 Financial assets, receivables and other financial receivables 40,440 49,607 Cash and cash equivalents 1,725 3,317 When reporting trade receivables, Borussia Under the simplified approach, loss allowances are Dortmund uses the simplified approach whereby recognised on an individual basis if one or more expected credit losses are recognised over the entire events occur that have a detrimental impact on the remaining term upon recognition. Expected credit creditworthiness of the debtor. These events include losses are calculated using the simplified approach, default in payment, impending insolvency or broken down by risk group and taking into account concessions by the debtor due to payment difficulties. historical default rates. The allocation to the Trade receivables are written off immediately if their respective risk groups is based on the shared credit recoverability is no longer expected with sufficient risk characteristics. At Borussia Dortmund, these are probability. This is the case, for example, when the receivables from transfer deals on the one hand, and debtor is in default. other trade receivables related primarily to ticketing, Receivables from transfer deals represent a merchandising and sponsorships on the other. Credit concentration of risk, which is hedged using loss rates specific to the risk clusters are calculated transfer rights. on the basis of the historical credit loss rates for the past three financial years and taking into account The change in loss allowances on the basis of the forward-looking macroeconomic indicators (gross expected credit losses for trade receivables as at 30 domestic product) as well as an assessment of the June 2021 is presented in the table below: economic impact of the COVID-19 pandemic. This method of calculation resulted in a loss rate that was insignificantly higher than in the previous year. EUR '000 2020/2021 2019/2020 Loss allowances as at 1 July in accordance with IFRS 9 3,982 1,852 Transfers recognised in profit or loss 497 2,552 Reversals recognised in profit or loss -626 -427 Items recognised outside profit or loss -2,675 0 Loss allowances in accordance with IFRS 9 4 5 Loss allowances as at 30 June 1,182 3,982 212