v3.21.2
TRADE ACCOUNTS RECEIVABLE AND TRADE RECEIVABLES SECURITIZATION PROGRAM
 9 Months Ended
Sep. 30, 2021
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 risk 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 September 30, 2021, 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 condensed consolidated 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 were as follows:
Nine Months Ended September 30, 2021
Rollforward of the Allowance for Credit Losses (US$ in millions)Short-term
Long-term (1)
Total
Allowance as of January 1, 2021$93 $51 $144 
Current period provisions25 — 25 
Recoveries(20)(1)(21)
Write-offs charged against the allowance(3)— (3)
Foreign exchange translation differences(2)(2)(4)
Allowance as of September 30, 2021$93 $48 $141 

(1)     Long-term portion of the allowance for credit losses included in Other non-current assets.

Nine Months Ended September 30, 2020
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)
55 — 55 
Recoveries(31)(2)(33)
Write-offs charged against the allowance(24)— (24)
Foreign exchange translation differences(9)(13)(22)
Allowance as of September 30, 2020(2)
$99 $50 $149 
(1)     Long-term portion of the allowance for credit losses included in Other non-current assets.
(2)     In addition to the above mentioned prior period provisions associated with lifetime expected credit losses, in 2020 the Company was engaged in collection proceedings with a customer in relation to an historical outstanding account receivable. During the nine months ended September 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 statements of income in relation to the matter. There was no impact to the condensed consolidated statement of income for the three months ended September 30, 2020.
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 up to $800 million against receivables sold into the Program. However, Bunge may from time to time, with the consent of the administrative agent, request one or more of the existing committed purchasers or new committed purchasers to increase the total commitments in an amount not to exceed $200 million pursuant to an accordion provision. On October 6, 2021, Bunge partially exercised the accordion provision and the total commitment was increased by $125 million to $925 million.

On May 17, 2021, Bunge and certain of its subsidiaries renewed and amended the Program. As a result, the Program terminates on May 17, 2031. However, each committed purchaser's commitment to purchase trade receivables under the Program will terminate on May 17, 2024, unless extended for an additional period in accordance with the terms of the receivables transfer agreement.
(US$ in millions)September 30,
2021		December 31,
2020
Receivables sold that were derecognized from Bunge's condensed consolidated balance sheet$1,347 $969 
Deferred purchase price included in Other current assets(1)
$544 $177 
(1)    Bunge's risk of loss following the sale of the trade receivables is limited to the deferred purchase price (the “DPP”), included in Other current assets in the consolidated balance sheets (see Note 7- Other Current Assets). The DPP will be repaid in cash as receivables are collected, generally within 30 days. Delinquencies and credit losses on trade receivables sold under the Program were $3 million and $5 million at September 30, 2021 and December 31, 2020, respectively.

    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.
Nine Months Ended
September 30,
(US$ in millions)20212020
Gross receivables sold$10,658 $7,663 
Proceeds received in cash related to transfer of receivables $10,015 $7,452 
Cash collections from customers on receivables previously sold $10,061 $6,662 
Discounts related to gross receivables sold included in Selling, general and administrative expense$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.