Accounts and Notes Receivable, Net

12 Months Ended

Dec. 31, 2019

ACCOUNTS AND NOTES RECEIVABLE - NET



(In millions)	December 31, 2019		December 31, 2018
Accounts receivable – trade¹	$	4,225	$	3,649
Notes receivable – trade²	171		194
Other³	1,132		1,417
Total accounts and notes receivable - net	$	5,528	$	5,260


^1.	Accounts receivable – trade is net of allowances of $174 million at December 31, 2019 and $127 million at December 31, 2018. Allowances are equal to the estimated uncollectible amounts. That estimate is based on historical collection experience, current economic and market conditions, and review of the current status of customers' accounts.

^2.

Notes receivable – trade primarily consists of receivables for deferred payment loan programs for the sale of seed products to customers. These loans have terms of one year or less and are primarily concentrated in North America. The company maintains a rigid pre-approval process for extending credit to customers in order to manage overall risk and exposure associated with credit losses. As of December 31, 2019 and 2018, there were no significant past due notes receivable which required a reserve, nor were there any significant impairments related to current loan agreements.


^3.	Other includes receivables in relation to indemnification assets, value added tax, general sales tax and other taxes. No individual group represents more than ten percent of total receivables. In addition, Other includes amounts due from nonconsolidated affiliates of $119 million and $101 million as of December 31, 2019 and 2018, respectively.

Accounts and notes receivable are carried at amounts that approximate fair value.

The company enters into various factoring agreements with third-party financial institutions to sell its trade receivables under both recourse and non-recourse agreements in exchange for cash proceeds. These financing arrangements result in a transfer of the company's receivables and risks to the third-party. As these transfers qualify as true sales under the applicable accounting guidance, the receivables are derecognized from the Consolidated Balance Sheets upon transfer, and the company receives a payment for the receivables from the third-party within a mutually agreed upon time period. For arrangements involving an element of recourse, which is typically provided through a guarantee of accounts in the event of customer default, the guarantee obligation is measured using market data from similar transactions and reported as a current liability in the Consolidated Balance Sheets.

Trade receivables sold under these agreements were $328 million, $133 million, $67 million, and $6 million for the year ended December 31, 2019, the year ended December 31, 2018, the period September 1 through December 31, 2017, and the period January 1 through August 31, 2017, respectively. The trade receivables sold that remained outstanding under these agreements which include an element of recourse as of December 31, 2019 and December 31, 2018 were $171 million and $37 million, respectively. The net proceeds received were included in cash provided by operating activities in the Consolidated Statements of Cash Flows. The difference between the carrying amount of the trade receivables sold and the sum of the cash received is recorded as a loss on sale of receivables in other income (expense) - net in the Consolidated Statements of Operations. The loss on sale of receivables were $44 million, $25 million, and $19 million, for the year ended December 31, 2019, the year ended December 31, 2018, and the period September 1 through December 31, 2017, respectively. The guarantee obligations recorded as of December 31, 2019 and December 31, 2018 in the Consolidated Balance Sheets were not material. See Note 18 - Commitments and Contingent Liabilities, for additional information on the company’s guarantees.