REVENUE

3 Months Ended

Mar. 31, 2020

Revenue from Contract with Customer [Abstract]

Revenue

REVENUE

Disaggregation of revenue

In the following table, revenue is disaggregated by product or service type. All revenue is recognized at a point in time when control of a product is transferred to a customer:

	Three Months Ended March 31, 2020
	Avon International		Avon Latin America		Total
Beauty:
Skincare	$	150.8	$	146.0	$	296.8
Fragrance	132.3		116.0		248.3
Color	85.0		63.7		148.7
Total Beauty	368.1		325.7		693.8
Fashion & Home:
Fashion	72.7		43.2		115.9
Home	13.2		76.9		90.1
Total Fashion & Home	85.9		120.1		206.0
Product sales	454.0		445.8		899.8
Representative fees	20.2		30.8		51.0
Other	2.9		3.6		6.5
Other revenue	23.1		34.4		57.5
Total revenue	$	477.1	$	480.2	$	957.3

	Three Months Ended March 31, 2019
	Avon International		Avon Latin America		Total
Beauty:
Skincare	$	172.3	$	177.0	$	349.3
Fragrance	151.7		146.3		298.0
Color	107.1		82.1		189.2
Total Beauty	431.1		405.4		836.5
Fashion & Home:
Fashion	103.4		60.9		164.3
Home	14.9		100.5		115.4
Total Fashion & Home	118.3		161.4		279.7
Product sales	549.4		566.8		1,116.2
Representative fees	24.3		39.6		63.9
Other	1.0		5.8		6.8
Other revenue	25.3		45.4		70.7
Total revenue	$	574.7	$	612.2	$	1,186.9

In January 2020 the Company became a fully owned subsidiary of Natura &Co. As a result of this transaction, the Company has updated its reportable segments to align with how the business is operated and managed since the merger with Natura, we have identified two reportable segments based on geographic operations: Avon International and Avon Latin America. In prior periods, the Company reported four segments: Europe, Middle East and Africa, Asia Pacific, South Latin America and North Latin America. Previously reported segment information has been recast throughout the consolidated financial statements, as applicable, for all periods presented to reflect the changes in the Company’s reportable segments. Refer to Note 10, Segment Information, to the Consolidated Financial Statements contained herein for more information.

Contract balances

The timing of revenue recognition generally is different from the timing of a promise made to a Representative. As a result, we have contract liabilities, which primarily relate to the advance consideration received from Representatives prior to transfer of the related good or service for material rights, such as loyalty points and status programs, and are primarily classified within other accrued liabilities (with the long-term portion in other liabilities) in our Consolidated Balance Sheets.

Generally, we record accounts receivable when we invoice a Representative. In addition, we record an estimate of an allowance for doubtful accounts on receivable balances based on an analysis of historical data and current circumstances, including seasonality, changing trends and the impact of COVID-19. The allowance for doubtful accounts is reviewed for adequacy, at a minimum, on a quarterly basis. We generally have no detailed information concerning, or any communication with, any ultimate consumer of our products beyond the Representative. We have no legal recourse against the ultimate consumer for the collection of any accounts receivable balances due from the Representative to us. If the financial condition of the Representatives were to deteriorate, resulting in their inability to make payments, additional allowances may be required.

The following table provides information about receivables and contract liabilities from contracts with customers at March 31, 2020 and December 31, 2019:

	March 31, 2020		December 31, 2019
Accounts receivable, net of allowances of $59.0 and $66.6	$	235.0	$	280.2
Contract liabilities	$	39.9	$	51.0

The contract liability balances relate to certain material rights (loyalty points, status program and prospective discounts). During the three months ended March 31, 2020, we recognized $31.4 of revenue related to the contract liability balance at the beginning of the three month period ended March 31, 2020, as the result of performance obligations satisfied. In addition, we deferred an additional $23.2 related to certain material rights granted during the period, for which the performance obligations are not yet satisfied. Of the amount deferred during the period, substantially all will be recognized within a year, with the significant majority to be captured within a quarter. The remaining movement in the contract liability balance is attributable to foreign exchange differences arising on the translation of the balance as at March 31, 2020 as compared with December 31, 2019.

Contract costs

Incremental costs to obtain contracts, such as bonuses or commissions, are recognized as an asset if the entity expects to recover them. However, ASC 340-40, Other Assets and Deferred Costs, offers a practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less. We elected the practical expedient and expense costs to obtain contracts when incurred because our amortization period is one year or less.

Costs to fulfill contracts with Representatives are comprised of shipping and handling (including order processing) and payment processing services, which are expensed as incurred. The fees for these services are included in the transaction price.