Accounts and Notes Receivable, Net

12 Months Ended

Dec. 31, 2020

ACCOUNTS AND NOTES RECEIVABLE - NET


(In millions)	December 31, 2020		December 31, 2019
Accounts receivable – trade1	$	3,754	$	4,225
Notes receivable – trade1,2	163		171
Other3	1,009		1,132
Total accounts and notes receivable - net	$	4,926	$	5,528

1.Accounts receivable – trade and notes receivable - trade are net of allowances of $208 million at December 31, 2020 and $174 million at December 31, 2019. Allowances are equal to the estimated uncollectible amounts. The allowance at December 31, 2020 is equal to the expected credit losses and was developed using a loss-rate method. The allowance at December 31, 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 December 31, 2020 and 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 $106 million and $119 million as of December 31, 2020 and 2019, respectively.

Accounts and notes receivable are carried at the expected amount to be collected, which approximates fair value.

The following table summarizes changes in the allowance for doubtful receivables for the twelve months ended December 31, 2020:


(In millions)
Balance at December 31, 2019	$	174
Additions charged to expense	154
Write-offs charged against allowance	(8)
Recoveries collected	(101)
Other	(11)
Balance at December 31, 2020	$	208

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 $255 million, $328 million, and $133 million for the years ended December 31, 2020, 2019 and 2018, respectively. The trade receivables sold that remained outstanding under these agreements which include an element of recourse as of December 31, 2020 and December 31, 2019 were $157 million and $171 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 $55 million, $44 million, and $25 million for the years ended December 31, 2020, 2019 and 2018, respectively. The guarantee obligations recorded as of December 31, 2020 and December 31, 2019 in the Consolidated Balance Sheets were not material. See Note 18 - Commitments and Contingent Liabilities, to the Consolidated Financial Statements, for additional information on the company’s guarantees.