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

9 Months Ended

Sep. 30, 2023

Cash, cash equivalents and restricted cash reported in the Company’s balance sheet as of September 30, 2023, December 31, 2022, September 30, 2022 and December 31, 2021 were as follows:


(DOLLARS IN MILLIONS)	September 30, 2023		December 31, 2022		September 30, 2022		December 31, 2021
Current assets
Cash and cash equivalents	$	629	$	483	$	538	$	711
Cash and cash equivalents included in Assets held for sale	23		52		—		—
Restricted cash	10		10		10		4
Non-current assets
Restricted cash included in Other assets	—		7		7		1
Cash, cash equivalents and restricted cash	$	662	$	552	$	555	$	716

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, 2023 and December 31, 2022, the Company’s gross accounts receivable were $1.886 billion and $1.871 billion, respectively. The Company’s contract assets and contract liabilities as of September 30, 2023 and December 31, 2022 were not material.

Schedule of Bad Debt Reserve

The following is a rollforward of the Company’s allowances for bad debts for the nine months ended September 30, 2023:


(DOLLARS IN MILLIONS)	Allowances for Bad Debts
Balance at December 31, 2022	$	53
Bad debt expense(1)	9
Write-offs	(6)

Foreign exchange	(1)
Balance at September 30, 2023	$	55

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(1)Bad debt expense included approximately $13 million related to expected credit losses on receivables from certain customers in Egypt, offset by approximately $8 million of reversals of allowances on receivables from customers located in Russia and Ukraine. The Company will continue to evaluate its credit exposure related to Egypt, Russia and Ukraine.