Accounts and Notes Receivable (Notes)

6 Months Ended

Jun. 30, 2020

Accounts and Notes Receivable [Abstract]

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

ACCOUNTS AND NOTES RECEIVABLE - NET

(In millions)	June 30, 2020		December 31, 2019		June 30, 2019
Accounts receivable – trade1	$	4,396	$	4,225	$	4,811
Notes receivable – trade1,2	1,391		171		1,291
Other3	985		1,132		1,332
Total accounts and notes receivable - net	$	6,772	$	5,528	$	7,434

^1.  Accounts receivable – trade and notes receivable - trade are net of allowances of $207 million at June 30, 2020, $174 million at December 31, 2019, and $152 million at June 30, 2019. The allowance at June 30, 2020 is equal to the expected credit losses and was developed using a loss-rate method. The allowance at December 31, 2019 and June 30, 2019 is equal to the estimated uncollectible amounts and 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 June 30, 2020, December 31, 2019, and June 30, 2019 there were no 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 10 percent of total receivables. In addition, Other includes amounts due from nonconsolidated affiliates of $114 million, $119 million, and $126 million as of June 30, 2020, December 31, 2019, and June 30, 2019, respectively.

Accounts and notes receivable are carried at the expected amount to be collected, which approximates fair value. The company establishes the allowance for doubtful receivables using a loss-rate method where the loss rate is developed using past events, historical experience, current conditions and forecasts that affect the collectability of the financial assets.

The following table summarizes changes in the allowance for doubtful receivables for the six months ended June 30, 2020:

(In millions)
Balance at December 31, 2019	$	174
Additions charged to expenses	124
Write-offs charged against allowance	(6		)
Recoveries collected	(78		)
Other	(7		)
Balance at June 30, 2020	$	207

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 $161 million and $176 million for the three and six months ended June 30, 2020, respectively, and $81 million and $84 million for the three and six months ended June 30, 2019, respectively. The trade receivables sold that remained outstanding under these agreements which include an element of recourse as of June 30, 2020, December 31, 2019, and June 30, 2019 were $146 million, $171 million, and $87 million, respectively. The net proceeds received are 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 - net in the Consolidated Statements of Operations. The loss on sale of receivables was $36 million and $38 million for the three and six months ended June 30, 2020 and $36 million and $37 million for the three and six months ended June 30, 2019, respectively. The guarantee obligations recorded as of June 30, 2020, December 31, 2019, and June 30, 2019 in the interim Condensed Consolidated Balance Sheets were not material. See Note 14 - Commitments and Contingent Liabilities for additional information on the company’s guarantees.