v3.20.2
TRADE ACCOUNTS RECEIVABLE AND TRADE RECEIVABLES SECURITIZATION PROGRAM
 6 Months Ended
Jun. 30, 2020
Transfers and Servicing [Abstract]  
TRADE ACCOUNTS RECEIVABLE AND TRADE RECEIVABLES SECURITIZATION PROGRAM TRADE ACCOUNTS RECEIVABLE AND TRADE RECEIVABLES SECURITIZATION PROGRAM
Trade Accounts Receivable
        Bunge establishes an allowance for lifetime expected credit losses utilizing an aging schedule for each pool of trade accounts receivable. The risk characteristics for each individual receivable were homogenous across the pool of trade accounts receivable and the determination of pools was sufficiently granular to address any differences in risk characteristics. Any receivables that did not share similar risk characteristics were separated into different pools for further analysis. Pools are determined based on risks characteristics such as the type of customer and geography. A default rate is derived using a provision matrix with data based on Bunge's historical receivables information. The default rate is then applied to the pool to determine the allowance for expected credit losses. Given the short term nature of the Company's trade accounts receivable, the default rate is only adjusted if significant changes in the credit profile of the portfolio are identified (e.g., poor crop years, credit issues at the country level, systematic risk), resulting in historic loss rates that are not representative of forecasted losses. Specifically, in establishing appropriate default rates as of June 30, 2020, the Company took into consideration expected impacts on its customers and other debtors in view of the COVID-19 pandemic, as well as other factors, which did not result in a material impact on the financial statements.

        Bunge records and reports accrued interest receivable within the same line item as the related receivable. The allowance for expected credit losses is estimated on the amortized cost basis of the trade accounts receivable, including accrued interest receivable. Bunge recognizes credit loss expense when establishing an allowance for accrued interest receivable.

Changes to the allowance for lifetime expected credit losses related to trade accounts receivable are as follows:
Rollforward of the Allowance for Credit Losses (US$ in millions)Short-term
Long-term (1)
Total
Allowance as of January 1, 2020$108  $65  $173  
Current period provisions (2)
42  —  42  
Recoveries(21) (2) (23) 
Write-offs charged against the allowance(21) —  (21) 
Foreign exchange translation differences(13) (12) (25) 
Allowance as of June 30, 2020 (2)
$95  $51  $146  
(1)  Long-term portion of the allowance for credit losses included in Other non-current assets as of June 30, 2020.
(2) In addition to the above mentioned current period provisions associated with lifetime expected credit losses, at June 30, 2020 the Company was engaged in collection proceedings with a customer in relation to an outstanding account receivable dating from 2015. During the three months ended June 30, 2020, Bunge recorded a $51 million bad debt reserve, within Selling, general and administrative expenses, as well as a $15 million legal provision, within Other income/expense – net, in its condensed consolidated financial statements in relation to the matter. As the litigation is ongoing, it is at least reasonably possible that the estimated amount of the loss will change in the near term.
Trade Receivables Securitization Program
Bunge and certain of its subsidiaries participate in a trade receivables securitization program (the “Program”) with a financial institution, as administrative agent, and certain commercial paper conduit purchasers and committed purchasers that provides for funding of receivables sold into the Program.
(US$ in millions)June 30,
2020		December 31,
2019
Receivables sold which were derecognized from Bunge's balance sheet$799  $801  
Deferred purchase price included in other current assets$118  $105  

        The table below summarizes the cash flows and discounts of Bunge’s trade receivables associated with the Program. Servicing fees under the Program were not significant in any period.
Six Months Ended
June 30,
(US$ in millions)20202019
Gross receivables sold$4,942  $4,663  
Proceeds received in cash related to transfer of receivables $4,759  $4,469  
Cash collections from customers on receivables previously sold $4,389  $3,846  
Discounts related to gross receivables sold included in SG&A$6  $8  

        Non-cash activity for the program in the reporting period is represented by the difference between gross receivables sold and cash collections from customers on receivables previously sold.