Accounts Receivable Factoring

12 Months Ended

Dec. 31, 2012

Accounts Receivable Factoring [Abstract]

Accounts Receivable Factoring

Accounts Receivable Factoring

The Company's Italian subsidiary has agreements with unrelated third-parties for the factoring of specific accounts receivable in Italy in order to reduce the amount of working capital required to fund such receivables. At December 31, 2012, Tecnonet's factoring facility agreements permitted the factoring of up to €23.0 million, or $30.3 million, worth of receivables in operations outside of the United States. The factoring of accounts receivable under these agreements is accounted for as a sale in accordance with ASC 860 Transfers and Servicing, and accordingly, is accounted for as an off-balance sheet arrangement. These receivables are of high quality and have a high level of collectability although they are with quasi-government agencies which are generally slower to pay.  Proceeds on the transfer reflect the face value of the account less a discount. The discount is recorded as a charge in "interest" in the consolidated statement of income in the period of the sale. Net funds received reduced accounts receivable outstanding while increasing cash. The Company has no significant retained interests or servicing liabilities related to the accounts receivable that have been sold in Italy.

As of the years ended December 31, 2012 and 2011, the face amount of total outstanding accounts receivables sold by the Company pursuant to these agreements was $57.8 million and $53.5 million, respectively. The related losses on the sale were $0.2 million for the years ended December 31, 2012 and December 31, 2011. The related outstanding balances on these amounts were $13.3 million and $10.1 million as of December 31, 2012 and December 31, 2011, respectively, as these amounts are due from the factors. These amounts are classified as non-trade receivables, included in "other receivables" on the balance sheet, and recorded at the lower of cost or fair value.