Revenue (Notes)

12 Months Ended

Dec. 31, 2019

Revenue from Contract with Customer [Abstract]

REVENUE

Revenue Recognition

Products

Substantially all of Corteva's revenue is derived from product sales. Product sales consist of sales of Corteva's products to farmers, distributors, and manufacturers. Corteva considers purchase orders, which in some cases are governed by master supply agreements, to be a contract with a customer. Contracts with customers are considered to be short-term when the time between order confirmation and satisfaction of the performance obligations is equal to or less than one year. However, the company has some long-term contracts which can span multiple years.

Revenue from product sales is recognized when the customer obtains control of the company's product, which occurs at a point in time according to shipping terms. Payment terms are generally less than one year from invoicing. The company elected the practical expedient and will not adjust the promised amount of consideration for the effects of a significant financing component when the company expects it will be one year or less between when a customer obtains control of the company's product and when payment is due. The company has elected to recognize shipping and handling activities when control has transferred to the customer as an expense in cost of goods sold. Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from revenues. In addition, the company elected the practical expedient to expense any costs to obtain contracts as incurred, as the amortization period for these costs would have been one year or less.

The transaction price includes estimates of variable consideration, such as rights of return, rebates, and discounts, that are reductions in revenue. All estimates are based on the company's historical experience, anticipated performance, and the company's best judgment at the time the estimate is made. Estimates of variable consideration included in the transaction price utilize either the expected value method or most likely amount depending on the nature of the variable consideration. These estimates are reassessed each reporting period and are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur upon resolution of uncertainty associated with the variable consideration. The majority of contracts have a single performance obligation satisfied at a point in time and the transaction price is stated in the contract, usually as quantity times price per unit. For contracts with multiple performance obligations, the company allocates the transaction price to each performance obligation based on the relative standalone selling price. The standalone selling price is the observable price which depicts the price as if sold to a similar customer in similar circumstances.

Licenses of Intellectual Property

Corteva enters into licensing arrangements with customers under which it licenses its intellectual property. Revenue from the majority of intellectual property licenses is derived from sales-based royalties. Revenue for licensing agreements that contain sales-based royalties is recognized at the later of (i) when the subsequent sale occurs or (ii) when the performance obligation to which some or all of the royalty has been allocated is satisfied.

Remaining Performance Obligations

Remaining performance obligations represent the transaction price allocated to unsatisfied or partially unsatisfied performance obligations. The company had remaining performance obligations related to material rights granted to customers for contract renewal options of $108 million and $102 million at December 31, 2019 and December 31, 2018, respectively. The company expects revenue to be recognized for the remaining performance obligations over the next 1 year to 6 years.

Contract Balances

Contract liabilities primarily reflect deferred revenue from prepayments under contracts with customers where the company receives advance payments for products to be delivered in future periods. Corteva classifies deferred revenue as current or noncurrent based on the timing of when the company expects to recognize revenue. Contract assets primarily include amounts related to contractual rights to consideration for completed performance not yet invoiced. Accounts receivable are recorded when the right to consideration becomes unconditional.



Contract Balances	December 31, 2019		December 31, 2018
(In millions)	December 31, 2019		December 31, 2018
Accounts and notes receivable - trade¹	$	4,396	$	3,843
Contract assets - current²	$	20	$	18
Contract assets - noncurrent³	$	49	$	46
Deferred revenue - current⁴	$	2,584	$	2,209
Deferred revenue - noncurrent⁵	$	108	$	150


^1.	Included in accounts and notes receivable - net in the Consolidated Balance Sheets.


^2.	Included in other current assets in the Consolidated Balance Sheets.


^3.	Included in other assets in the Consolidated Balance Sheets.


^4.	Included in accrued and other current liabilities in the Consolidated Balance Sheets.


^5.	Included in other noncurrent obligations in the Consolidated Balance Sheets.

Revenue recognized during the year ended December 31, 2019 from amounts included in deferred revenue at the beginning of the period was $2,146 million. Revenue recognized during the year ended December 31, 2018 from amounts included in deferred revenue at the beginning of the period was $1,967 million.

Disaggregation of Revenue

Corteva's operations are classified into two reportable segments: seed and crop protection. The company disaggregates its revenue by major product line and geographic region, as the company believes it best depicts the nature, amount and timing of its revenue and cash flows. Net sales by major product line are included below:



	Successor						Predecessor
(In millions)	For the Year Ended December 31, 2019		For the Year Ended December 31, 2018		For the Period September 1 through December 31, 2017		For the Period January 1 through August 31, 2017
Corn	$	5,111	$	5,180	$	1,205	$	3,941
Soybean	1,371		1,494		163		1,384
Other oilseeds	561		607		143		423
Other	547		561		9		117
Seed	7,590		7,842		1,520		5,865
Herbicides	3,270		3,415		1,150		377
Insecticides	1,652		1,506		567		108
Fungicides	1,081		1,142		406		544
Other	253		382		147		—
Crop Protection	6,256		6,445		2,270		1,029
Total	$	13,846	$	14,287	$	3,790	$	6,894

Sales are attributed to geographic regions based on customer location. Net sales by geographic region and segment are included below:



Seed	Successor						Predecessor
(In millions)	For the Year Ended December 31, 2019		For the Year Ended December 31, 2018		For the Period September 1 through December 31, 2017		For the Period January 1 through August 31, 2017
North America¹	$	4,724	$	4,974	$	437	$	4,227
EMEA²	1,378		1,408		256		1,017
Asia Pacific	358		358		107		231
Latin America	1,130		1,102		720		390
Total	$	7,590	$	7,842	$	1,520	$	5,865


1.	Represents U.S. & Canada.


2.	Europe, Middle East, and Africa ("EMEA").



Crop Protection	Successor						Predecessor
(In millions)	For the Year Ended December 31, 2019		For the Year Ended December 31, 2018		For the Period September 1 through December 31, 2017		For the Period January 1 through August 31, 2017
North America	$	2,205	$	2,438	$	787	$	352
EMEA	1,362		1,357		279		270
Asia Pacific	930		935		321		149
Latin America	1,759		1,715		883		258
Total	$	6,256	$	6,445	$	2,270	$	1,029

Refer to Note 24 - Geographic Information, for the breakout of consolidated net sales by geographic region.