Nature of Operations and Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2021

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the Company's statement of cash flows periods ended September 30, 2021 and September 30, 2020 to the amounts reported in the Company's balance sheet as of September 30, 2021, December 31, 2020, September 30, 2020 and December 31, 2019. The increase in restricted cash as of September 30, 2021 is due to proceeds received in advance of the sale of the Company's fruit preparation business. See Note 17 for additional information.


(DOLLARS IN MILLIONS)	September 30, 2021		December 31, 2020		September 30, 2020		December 31, 2019
Current assets
Cash and cash equivalents	$	672	$	650	$	470	$	607
Restricted cash	122		7		13		17
Noncurrent assets
Restricted cash included in Other assets	1		3		1		—
Cash, cash equivalents and restricted cash	$	795	$	660	$	484	$	624

Contract Asset and Accounts Receivable

Contract Assets and Liabilities

With respect to a small number of contracts for the sale of compounds, the Company has an “enforceable right to payment for performance to date” and as the products do not have an alternative use, the Company recognizes revenue for these contracts over time and records a contract asset using the output method. The output method recognizes revenue on the basis of direct measurements of the value to the customer of the goods or services transferred to date relative to the remaining goods or services promised under the contract.

As of September 30, 2021 and December 31, 2020, the Company's gross accounts receivable was $2.019 billion and $950 million, respectively. The Company's contract assets and contract liabilities as of September 30, 2021 and December 31, 2020 were not material.

Schedule of Bad Debt Reserve

Expected Credit Losses

The Company is exposed to credit losses primarily through its sales of products. To determine the appropriate allowance for expected credit losses, the Company considers certain credit quality indicators, such as aging, collection history, and creditworthiness of debtors. Regional and Global Credit committees review and approve specific customer allowance reserves. The allowance for expected credit losses is primarily based on two primary factors: i) the aging of the different categories of trade receivables, and ii) a specific reserve for accounts identified as uncollectible.

The Company also considers current and future economic conditions in the determination of the allowance. At September 30, 2021, the Company reported $1.975 billion of trade receivables, net of allowances of $44 million. Based on the aging analysis as of September 30, 2021, approximately 91% of our accounts receivable were current based on the payment terms of the invoice. Receivables that are past due by over 365 days account for approximately 1% of our accounts receivable.

The following is a rollforward of the Company's allowances for bad debts for the nine months ended September 30, 2021, with the write-offs being under $1 million, which was not material:


(DOLLARS IN MILLIONS)	Allowances for Bad Debts
Balance at December 31, 2020	$	21
Bad debt expense	4

Other adjustments(1)	20
Foreign exchange	(1)
Balance at September 30, 2021	$	44