Accounts Receivable

9 Months Ended

Jun. 30, 2018

Receivables [Abstract]

Accounts Receivable

ACCOUNTS RECEIVABLE

The following summarizes Valvoline’s accounts receivable:

(In millions)	June 30 2018			September 30 2017
Trade and other accounts receivable	$	467		$	390
Less: Allowance for doubtful accounts	(6		)	(5		)
	$	461		$	385

In May 2017, Valvoline’s former parent company, Ashland Global Holdings Inc. (which together with its predecessors and consolidated subsidiaries is referred to as “Ashland”), distributed its remaining interest in Valvoline to Ashland shareholders (the “Distribution”). Prior to the Distribution, Ashland was party to an agreement to sell certain Valvoline customer accounts receivable in the form of drafts or bills of exchange to a financial institution. Each draft constituted an order to pay for obligations of the customer to Ashland arising from the sale of goods to the customer. The intention of the arrangement was to decrease the time accounts receivable was outstanding and increase cash flows as Ashland in turn remitted payment to Valvoline. During the nine months ended June 30, 2017, $40 million of accounts receivable were sold to the financial institution under this agreement.

Following the Distribution, Valvoline became party to the arrangement to sell certain customer accounts receivable in the form of drafts or bills of exchange to the financial institution. During the nine months ended June 30, 2018, Valvoline sold $50 million of accounts receivable to the financial institution.