176 Vodafone Group Plc Annual Report 2026
Strategic report
Governance
Financials
Other information
2026 €m
2025 €m
14. Trade and other receivables Trade and other receivables mainly consist of amounts owed to us by customers and amounts that we pay to our suppliers in advance. Derivative financial instruments with a positive market value are reported within this note as are contract assets, which represent an asset for accrued revenue in respect of goods or services delivered to customers for which a trade receivable does not yet exist, and finance lease receivables recognised where the Group acts as a lessor. See note 20 ‘Leases’ for more information on the Group’s leasing activities. Accounting policies Trade receivables represent amounts owed by customers where the right to receive payment is conditional only on the passage of time. Trade receivables that are recovered in installments from customers over an extended period are discounted at market rates and interest revenue is accreted over the expected repayment period. Other trade receivables do not carry any interest and are stated at their nominal value. When the Group establishes a practice of selling portfolios of receivables from time to time these portfolios are recorded at fair value through other comprehensive income; all other trade receivables are recorded at amortised cost. The carrying value of all trade receivables, contract assets and finance lease receivables recorded at amortised cost is reduced by allowances for lifetime estimated credit losses. Estimated future credit losses are first recorded on the initial recognition of a receivable and are based on the ageing of the receivable balances, historical experience and forward-looking considerations. Individual balances are written off when management deems them not to be collectible. 2026 2025 €m €m Included within non-current assets Trade receivables 7 6 Trade receivables held at fair value through other comprehensive income 319 289 Net investment in leases 348 372 Contract assets 502 496 Contract-related costs 718 822 Other receivables 160 82 Prepayments 285 300 Derivative and other financial instruments 1 2,882 4,064 5,221 6,431
Included within current assets Trade receivables
3,899 380 2,480 93 1,428 172 1,074 965
3,236 421 2,473 88 1,253 166 928 706 133 9,404
Trade receivables held at fair value through other comprehensive income
Net investment in leases Contract assets Contract-related costs
Amounts owed by associates and joint ventures
Other receivables Prepayments
Derivative and other financial instruments 1
93
10,584
Note: 1. Items are measured at fair value and the valuation basis is level 2 classification, which comprises items where fair value is determined from inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. The Group’s trade receivables and contract assets are classified at amortised cost unless stated otherwise and are measured after allowances for future expected credit losses, see note 22 ‘Capital and financial risk management’ for more information on credit risk. The carrying amounts of trade and other receivables, which are measured at amortised cost, approximate their fair value and are predominantly non-interest bearing. The Group’s contract-related costs comprise €2,098 million (2025: €2,000 million) relating to costs incurred to obtain customer contracts and €48 million (2025: €75 million) relating to costs incurred to fulfil customer contracts; an amortisation and impairment expense, excluding discontinued operations in Spain and Italy, of €1,038 million (2025: €935 million) was recognised in operating profit during the year. The fair values of the derivative financial instruments are calculated by discounting the future cash flows to net present values using appropriate market interest rates and foreign currency rates prevailing at 31 March.
Powered by FlippingBook