|
6. OTHER CURRENT ASSETS
Other current assets consist of the following:
|
|
|
September 30, |
|
December 31, |
|
|
(US$ in millions) |
|
2011 |
|
2010 |
|
|
Prepaid commodity purchase contracts(1) |
|
$ |
464 |
|
$ |
267 |
|
|
Secured advances to suppliers, net(2) |
|
295 |
|
245 |
|
|
Unrealized gains on derivative contracts at fair value |
|
2,094 |
|
2,619 |
|
|
Recoverable taxes - current |
|
587 |
|
500 |
|
|
Margin deposits(3) |
|
366 |
|
926 |
|
|
Marketable securities |
|
98 |
|
39 |
|
|
Deferred purchase price receivable(4) |
|
155 |
|
— |
|
|
Prepaid expenses |
|
408 |
|
308 |
|
|
Other |
|
646 |
|
564 |
|
|
Total |
|
$ |
5,113 |
|
$ |
5,468 |
|
(1) Prepaid commodity purchase contracts represent advance payments against fixed priced contracts for future delivery of specified quantities of agricultural commodities. These contracts are recorded at fair value based on prices of the underlying agricultural commodities.
(2) Bunge provides cash advances to suppliers, primarily Brazilian farmers of soybeans and other agricultural commodities, to finance a portion of the suppliers’ production costs. Bunge does not bear any of the costs or risks associated with the related growing crops. The advances are largely collateralized by future crops and physical assets of the suppliers, carry a local market interest rate and settle when the farmer’s crop is harvested and sold. The secured advances to farmers are reported net of allowances of $3 million at September 30, 2011 and $3 million at December 31, 2010. Changes in the allowance for the nine months ended September 30, 2011 included an increase of $2 million for additional bad debt provisions and a reduction in the allowance for recoveries of $2 million. Changes in the allowance for the year ended 2010 included an increase of $1 million for additional bad debt provisions and a reduction in the allowance for recoveries of $1 million.
Interest earned on secured advances to suppliers of $5 million and $4 million for the three months ended September 30, 2011 and 2010, respectively, and $17 million and $19 million for the nine months ended September 30, 2011 and 2010, respectively, is included in net sales in the condensed consolidated statements of income.
(3) Margin deposits include U.S. treasury securities at fair value and cash.
(4) Deferred purchase price receivable represents additional credit support for the investment conduits in Bunge’s accounts receivables sales program (see Note 13) and is recognized at its estimated fair value.
|