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Muang Thai Life Assurance Public Company LimitedNotes to the financial statements for the year ended 31 December 2024Muang Thai Life Assurance Public Company LimitedNotes to the financial statementsFor the year ended 31 December 202425ECLs are measured on either of the following bases:- 12-month ECLs: these are losses that are expected to result from possible default events within the 12 months after the reporting date; or- lifetime ECLs: these are losses that are expected to result from all possible default events over the expected lives of a financial instrument.The Company recognises ECLs equal to 12-month ECLs unless there has been a significant increase in credit risk of the financial instrument since initial recognition or credit-impaired financial assets, in which case the loss allowance is measured at an amount equal to lifetime ECLs. The maximum period considered when estimating ECLs is the maximum contractual period over which the Company is exposed to credit risk.ECLs are remeasured at each reporting date to reflect changes in the financial instrument%u2019s credit risk since initial recognition. Increased in loss allowance is recognised as an impairment loss in profit or loss. Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets. For debt securities at FVTOCI, the Company recognises an impairment loss in profit or loss with the corresponding entry in other comprehensive income.ECLs for investments in debt securitiesProbabilities of default (PD) and loss given default (LGD) for investment in debt securities are based on historical data supplied by rating agency for each credit rating.The Company considers debt securities to have low credit risk when its credit rating is equivalent to the globally understood definition of %u2018investment grade%u2019. The Company assumes that the credit risk on debt securities has increased significantly if it is significant deterioration in debt securities%u2019 credit rating.The Company considers debt securities to be in default when: - the debtor is unlikely to pay its credit obligations to the Company in full; or- the debt securities are more than 1 days past due.The assessment of a significant increase in credit risk is performed on an instrument basis and individual basis. (o) Impairment of non-financial assets The carrying amounts of the Company%u2019s assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the assets%u2019 recoverable amounts are estimated. For intangible assets that have indefinite useful lives or are not yet available for use, the recoverable amounts are estimated each year at the same time.An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. The impairment loss is recognised in profit or loss unless it reverses a previous revaluation credited to equity in which case it is charged to equity.Calculation of recoverable amountThe recoverable amount of a non-financial asset is the greater of the asset%u2019s value in use and fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pretax discount rate that reflects current market assessments of the time value of money and the risk specific to the asset. For an asset that does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the cash-generating unit to which the asset belongs.Annual Report 2024 I Muang Thai Life Assurance PCL 161