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Allowances for doubtful accounts receivables are reviewed by Superior at each balance sheet date. Superior updates its estimate of the allowance for doubtful accounts based on the evaluation of the recoverability of trade receivables with each customer, taking into account historical collection trends of past due accounts and current economic conditions. Trade receivables are written-off once it is determined they are not collectable.
Pursuant to their respective terms, trade receivables, before deducting an allowance for doubtful accounts, are aged as follows:
March 31, 2013 December 31, 2012----------------------------------------------------------------------------Current 264.3 243.1Past due less than 90 days 101.5 108.2Past due over 90 days 10.7 11.8----------------------------------------------------------------------------Trade receivables 376.5 363.1--------------------------------------------------------------------------------------------------------------------------------------------------------
The current portion of Superior's trade receivables is neither impaired nor past due and there are no indications as of the reporting date that the debtors will not make payment.
Superior's trade receivables are stated after deducting a provision of $7.0 million as at March 31, 2013 (December 31, 2012 - $7.2 million). The movement in the provision for doubtful accounts was as follows:
March 31, 2013 December 31, 2012----------------------------------------------------------------------------Allowance for doubtful accounts, at the beginning of the period (7.2) (20.8) Impairment losses recognized on receivables (1.0) (3.9) Amounts written off during the period as uncollectible 1.2 17.5----------------------------------------------------------------------------Allowance for doubtful accounts at the end of the period (7.0) (7.2)--------------------------------------------------------------------------------------------------------------------------------------------------------
Liquidity Risk
Liquidity risk is the risk that Superior cannot meet a demand for cash or fund an obligation as it comes due. Liquidity risk also includes the risk of not being able to liquidate assets in a timely manner at a reasonable price.
To ensure it is able to react to contingencies and investment opportunities quickly, Superior maintains sources of liquidity at the corporate and subsidiary levels. The main sources of liquidity are cash and other financial assets, the undrawn committed revolving-term bank credit facility, equity markets and debenture markets.
Superior is subject to the risks associated with debt financing, including the ability to refinance indebtedness at maturity. Superior believes these risks are mitigated through the use of long-term debt secured by high-quality assets, maintaining debt levels that in management's opinion are appropriate, and by diversifying maturities over an extended time. Superior also seeks to include in its agreements terms that protect it from liquidity issues of counterparties that might otherwise impact liquidity.
