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Bad Debt on Physical Coal Bad Debt on Physical Coal (Notes)
12 Months Ended
Sep. 30, 2018
Bad Debt on Physical Coal [Abstract]  
Unusual or Infrequent Items, or Both, Disclosure [Text Block]
Note 17Bad Debt on Physical Coal
During the first quarter of fiscal 2018 and the fourth quarter of fiscal 2017, the Company recorded charges to earnings of $1.0 million and $47.0 million, respectively, to record an allowance for doubtful accounts related to a bad debt incurred in the physical coal business, conducted solely in the Company’s Singapore subsidiary, INTL Asia Pte. Ltd., with a coal supplier. Components of the bad debt on physical coal include allowances on amounts due to the Company from the supplier related to: coal paid for but not delivered to clients; reimbursement of demurrage claims, dead freight and other charges paid by INTL Asia Pte. Ltd. to its clients; reimbursement due for deficiencies in the quality of coal delivered to clients; and losses incurred related to the cancellation of open sales contracts.
During fiscal 2017, the Company purchased coal delivered onto barges and paid 80% of the value against bills of lading and purchase invoices, with the remaining 20% payable following inspection upon delivery to clients’ vessels. The Company took title of the coal when it was loaded onto barges and maintained title until it was offloaded onto clients’ vessels. The logistics related to the delivery of coal to the clients’ vessels was out-sourced to the Company’s coal supplier, and the Company determined that certain purchased coal was not delivered to the clients’ vessels during the fourth quarter ended September 30, 2017. Furthermore, the Company determined that the supplier was unable to deliver such purchased coal to its clients. Demurrage claims, dead freight, and other penalty charges paid and payable by INTL Asia Pte. Ltd. to its clients were due to be reimbursed by the supplier based on transaction agreements with the supplier. The Company determined the supplier was unable to make this reimbursement.
The Company received an acknowledgment of debt and a note from the supplier, however, there is substantial uncertainty as to whether the supplier will be able to meet its financial obligations to the Company and as to the timing of any recovery. The Company continues to pursue all legal avenues available to it regarding this matter. The bad debt on physical coal is presented separately as a component of income before tax in the consolidated income statements. The Company has completed its exit of the physical coal business, which was part of our Physical Commodities segment and was conducted solely in INTL Asia Pte. Ltd.
On November 22, 2018, the Company reached a settlement with a client, paying $5.1 million related to demurrage, dead freight, and other penalty charges regarding coal supplied during fiscal 2017. The settlement amount paid was less than the accrued liability for the transactions recorded during fiscal 2017, and accordingly the Company will record a recovery on the bad debt on physical coal of $1.7 million in the three months ending December 31, 2018.